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

SUGGESTED ANSWERS Chapter 14: OTHER PERCENTAGE TAXES

CHAPTER 14

PERCENTAGE TAXES
Problem 141
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 142
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 races 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 143
Problem 144
1.
B
1.
A
2.
A
2.
A should be is
NOT exempt
from OPT.
3.
B
3.
C
4.
B
4.
A

5.
6.
7.
8.
9.

10.
11.
12.

C
C
A
B
D should be
NOT covered by
P1,919,500
threshold.
C
D
C

5.
6.
7.
8.
9.

D
B
A
B
D

10.
11.
12.

B
A
C