CHAPTER 14 PERCENTAGE TAXES2013

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BUSINESS AND TRANSFER TAXATION 6th Edition (BY: VALENCIA & ROXAS) 105
SUGGESTED ANSWERS
Chapter 14: OTHER PERCENTAGE TAXES

CHAPTER 14

PERCENTAGE TAXES

Problem 14–1
1. False – 3% of gross sales or gross receipts.

2. False – business tax.
3. False – advalorem tax.

4. False – if the business is VAT-registered or engaged in business tax-exempt transactions, it shall not be subject to 3% OPT. Also not all OPT rate is 3%.

5. False – Non-VAT business is not allowed to have Input VAT.
6. True

7. False – expressly exempted from business tax by law. (R.A. 8424)

8. False – the 3% is applicable only to transport by land. Transport by water and air is subject to 12% VAT.

9. True
10. False – 2% percentage tax.
11. True
12. True
13.
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24A,NIRC)

P 50,000

Note: Owners of bancas and owners of animal-drawn two-wheeled vehicles are business tax-exempt; but subject to income taxes.

Problem 14 – 17
B

Percentage taxes:

Taxi (P1,500,000 x 3%)
P45,000
Bus (15 x P7,200 x 3%)
3,240
VAT (P50,000 x 12%)

6,000
Common carrier tax due

P54,240

Note: The gross receipts from the transport of cargoes by domestic carriers by land shall still subject to 12% VAT. (R.A. 9337)

BUSINESS AND TRANSFER TAXATION 6th Edition (BY: VALENCIA & ROXAS) 108
SUGGESTED ANSWERS

Chapter 14: OTHER PERCENTAGE TAXES
Problem 14 – 18
D

Total gross receipts (P1,000,000 + P6,000,000)
P7,000,000
Multiplied by applicable business tax rate

12%
Total business tax

P 840,000

Note: Common carrier by sea is subject to VAT of 12%.

Problem 14 – 19
A

Percentage tax

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