Business and Transfer Taxation Valencia 6th Ed.

BUSINESS AND TRANSFER TAXATION 6th Edition (BY: VALENCIA & ROXAS) 70

SUGGESTED ANSWERS

Chapter 10: VAT ON GOODS OR PROPERTIES

CHAPTER 10

VALUE-ADDED TAX

Problem 10–1

1. False – subject to VAT. This is considered as transaction deemed sale.

2. True

3. False – sale of real property classified as capital asset is not subject to VAT.

4. False – sale of real property classified as ordinary asset is exempt from VAT if the amount of lot is P1,919,500 and below or house and lot if the price is P3,199,200 and below.

5. True

6. False – acquisition cost or current market price of goods whichever is lower.

7. True

8. False – the basis is the amount of debt cancelled.

9. True

10. False – subject to VAT.

11. True

12. True

13. True

14. False – not subject to output VAT. This is to be treated as operating expense.

15. False – not transactions deemed sale.

Problem 10–2

1. False – subject to VAT.

2. True

3. True

4. True

5. False – the exemption is applicable only to residential lot and the amount of selling price should not exceed P1,919,500 per residential lot.

6. True

7. False – this would refer to gross selling price.

8. False – deemed inclusive of VAT.

9. True

10. True

11. False – disregarded as part of the initial payment.

12. True

13. True

14. True

15. False – original estate and not subject to VAT.

Problem 10–3 | Problem 10–4 |

1. | D | 1. | C |

2. | A | 2. | D |

3. B | 3. | A |

4. C | 4. | C |

5. C | 5. | D |

6. | D | 6. | B |

7. B | 7. | A & B |

8. | A | 8. | D |

9. | A | 9. | B |

10. A | 10. B |

BUSINESS AND TRANSFER TAXATION 6th Edition (BY: VALENCIA & ROXAS) 71

SUGGESTED ANSWERS

| | Chapter 10: VAT ON GOODS OR PROPERTIES |

Problem 10 – 5 | A | | | |

Warehouse | | | P4,000,000 |

Business delivery trucks | | 500,000 |

Amount subject to VAT | |...