CHAPTER 14 PERCENTAGE TAXES2013

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. False – Premium collections outside the Philippines from nonresident person is exempt.
14. True
15. False – only gross receipts within.

Problem 14–2
1. False – Option to register not required under OPT. The business can also register as VAT.
2. True
3. False – minimum quarterly receipts or actual quarterly gross receipts, whichever is higher.
4. True
5. False – Subject to VAT for being registered as VAT

6. False – CNN is exempt from OPT because the communication is for news services.
7. True
8. True
9. False – amusement taxes ranging from 10% to 30%

10. True
11. False – Horse race’s cost of winning ticket is deductible.
12. False – not deductible.
13. False – only interest is subject to GRT
14. False – national tax
15. True

Problem 14–3
Problem 14–4
1.
B
1.
A
2.
A
2.
A should be “is NOT exempt

from OPT.”
3.
B
3.
C
4.
B
4.
A
5.
C
5.
D
6.
C
6.
B
7.
A
7.
A
8.
B
8.
B
9.
D should be “NOT covered by
9.
D

P1,919,500 threshold.”

10.
C
10.
B
11.
D
11.
A
12.
C
12.
C

BUSINESS AND TRANSFER TAXATION 6th Edition (BY: VALENCIA & ROXAS) 106
SUGGESTED ANSWERS
Chapter 14: OTHER PERCENTAGE TAXES

Problem 14 – 5 D

Zero. Monthly rental income of P12,800 or less per unit of residential property is exempt from