1. Which of the following is not one of the nature or characteristics of VAT?
A. Excise Tax
B. Ad Valorem
C. Indirect Tax
D. None of the choices
2. The following are characteristics of VAT, except
A. Fiscal Tax
B. Sumptuary
C. National Tax
D. Proportional Tax Exempt Transactions
3. Which of the following transactions is subject to VAT?
A. agricultural and marine food product in their original state;
B. livestock and poultry used as, or producing foods for human consumption
C. breeding stock and genetic materials.
D. None of the choices
4. Mr. Felipe sells various food products as a trader. Which of the following products sold is subject to
VAT?
I. Frozen meat
II. Tuyo
III. Litson Manok
IV. Boneless Bangus
A. I and II
B. I and III
C. III and IV
D. none of the choices
5. Ms. Papa imported the following products during the month. Which of the following is subject to VAT?
A. Rice
B. Muscovado
C. Corn grits
D. Brown sugar
6. Mr. Hung Hang, a Filipino-Chinese VAT-registered businessman, exported ordinary salt and copra to
Germany. What is the classification of such exports?
A. Subject to 12% VAT
B. Zero-rated transaction
C. VAT-exempt transaction
D. Either “a” or “b”
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7. Bob is an animal lover. He imported the following animals during year:
I. Dog for breeding purposes
II. Fighting cocks to be fought in the international derbies I
III. Pigs for breeding
IV. Cows for breeding
Which of the above importations are exempt from VAT?
A, I and II
B. III and IV
C. I, III and IV
D. I, II, III and IV
8. Maripet, a resident citizen, went into shopping spree in Japan for personal use. What is the VAT
implication once the goods are brought into to the Philippines?
A. Exempt from VAT
B. Exempt from VAT if the goods are exempt from customs duties.
C. Subject to 12% VAT
D. Considered as zero-rated transaction
9. Diego is a driver in USA for the past 30 years. He wants to enjoy the rest of his life in the Philippines.
When he went back to the Philippines to settle permanently, he brought with him the following:
I. Wearing apparel
II. Domestic animals
III. Personal household effects
IV. Vehicle
Which of the above items is/are EXEMPT from VAT?
A. I only
B. I, II and IV only
C. I and II only
D. IV only
10. Which of the following services is subject to VAT?
A. Transport of passengers by a Public Utility Bus
B. Transport of passengers by Philippine Airlines
C. Transport of passengers by an International Carrier
D. Transport of goods, cargoes and mails by an International Carrier
11. Which of the following services is not subject to VAT?
A. Services rendered by a proprietary educational institution.
B. Seminars on TRAIN conducted by SGV & Co.
C. Review classes held by ARC, an accounting review center.
D. Cooking classes conducted by Juday.
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12. Which of the following is subject to VAT?
A. Gross receipts from lending activities by credit or multi-purpose cooperatives.
B. Sales by non-agricultural or non-credit cooperatives,the share capital contribution of each member
does not exceed P15,000.
C. Importation by agricultural cooperatives of machineries and equipment to be used directly and
exclusively in the production and/or processing of their produce.
D. Gross receipts by electric cooperatives, the share capital contribution of each member does not
exceed P15,000.
13. Jun, a non-VAT registered person, exported Tobacco to Japan. The total revenue derived by him
during the year is 4million pesos. What is the classification of the exports for VAT purposes?
A. Subject to 12% VAT
B. Zero-rated transaction
C. VAT-exempt transaction
D. Either “b” or “c”
14. EDT Bookshop sold in June 2021 hardcopies of Tax Books of Professor Enrico D. Tabag. What is the
classification of the transaction for VAT purposes?
A. Subject to 12% VAT
B. Zero-rated transaction
C. VAT-exempt transaction
D. Either “b” or “c”
15. Based on the preceding number, suppose the bookshop also sells e Books, what is the classification
of the transaction for VAT purposes?
A. Subject to 12% VAT
B. Zero-rated transaction
C. VAT-exempt transaction
D. Either “b” or “c”
16. Who is statutorily liable in the payment of VAT?
A. The seller
B. The buyer
C. Either “a” or “b”
D. Neither “a” nor “b”
17. Andoks, a restaurant, sold litson manok. What is the classification of the transaction?
A. Subject to 12% VAT
B. Zero-rated transaction
C. VAT-exempt transaction
D. Either “a” or “b”
18.Sale or importation of ingredients in making ordinary feeds is:
A. exempt from VAT
B. subject to 12% VAT
C. one of the zero-rated transactions
D. none of the choices
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19.A nurse who worked in Canada for 20 years decided to retire and returned home to the Philippines to
reside here permanently. She brought with her personal and household effects. What is the treatment of
such goods, for VAT purposes, once they entered Philippine territory?
A. Exempt from VAT
B. Exempt from VAT if the goods are exempt from customs duties.
C. Subject to 12% VAT
D. Considered as zero-rated transaction
20.Service fee for milling cassava into flour is:
A. Exempt from VAT
B. Subject to 12% VAT
C. Considered as zero-rated transaction
D. Subject to franchise tax
21. An importer of flowers from abroad:
A. Is liable for VAT, if it registers as a VAT person.
B. Is exempt from VAT, because the goods are treated as agricultural products.
C. Is exempt from VAT, provided that his total importation of flowers does not exceed P3,000,000.
D. Is liable for VAT, despite the fact that it did not register as a VAT person and his total annual sales of
flowers do not exceed P3,000,000.
22. Which of the following sale or importation of goods shall not be exempt from VAT?
A. Fertilizers
B. Seeds, seedlings and fingerlings
C. Fish, prawn, livestock and poultry feeds, including ingredients, whether locally produced or
imported,used in the manufacture of finished feeds
D. Specialty feeds.
23. Which of the following transactions is exempt from value-added-tax?
A. Medical services such as dental and veterinary services rendered by professionals.
B. Legal services.
C. Services arising from employee-employer relationship.
D. Services rendered by domestic air transport companies.
24. Statement 1: Sale by agricultural cooperatives to non members can only be exempted from VAT if the
producer of the agricultural products sold is the cooperative itself. If the cooperative is not the producer
(e.g. trader), then only those sales to its members shall be exempted from VAT.
Statement 2: Sale or importation of agricultural food products in their original state is exempt from VAT
irrespective of the seller and buyer thereof.
A. true, true
B. true, false
C. false, false
D. false, true
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25. Which of the following shall be exempt from vat?
A. Services of banks.
B. Services of money changers and pawnshops.
C. Services of credit cooperatives
D. All of the above
26. Which of the following sales of real properties held primarily for sale to customers shall be subject
to VAT?
A. Sale of parking lot where the selling price is P1,800,000.
B. Sale of 2 adjacent residential lots in favor of one buyer from the same seller at P725,000 per lot.
C. Sale of 2 adjacent residential dwellings in favor of one buyer from the same seller at P1,225,000 per
residential dwelling.
D. Sale to one buyer from the same seller of 2 condominium units which are combined and utilized as
one residential unit where the aggregate value of the adjacent units exceeds P1,500,000.
27. Which of the following lessors of residential units is/are subject to VAT?
I II III IV
Number of apartment units 100 20 16 18
Monthly rent per unit P14,800 P15,000 P15,400 P15,100
A. I and IV B. I, II and IV C. IV only D. All of the above
28. True or false:
Statement 1: The sale of cars by a dealer is considered done in the course of trade or business.
Statement 2: The sale of personal car is considered done in the course of trade or business and
therefore subject to VAT
Statement 1 Statement 2
A. True True
B. True False
C. False True
D. False False
29. True or false:
Statement 1: Livestock shall include cows, bulls and calves, pigs, sheep, goats and rabbits.
Statement 2: Poultry shall include fowls, ducks, geese and turkey.
Statement 3: Livestock does not include fighting cocks, race horses, zoo animals and other animals
generally considered as pets.
Statement 4: Marine food products shall include fish and crustaceans, such as, but not limited to eels,
trout, lobster, shrimps, prawns, oysters, mussels and clams.
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Statement 1 Statement 2 Statement 3 Statement 4
A. True True True True
B. True False True False
C. False True False True
D. False False False False
30. True or false:
Statement 1: Sale, importation or lease of passengers or cargo vessels and aircraft, including engine,
equipment and spare parts thereof for domestic or international transport operations
shall be exempt from VAT.
Statement 2: The term “books, newspaper, magazine, review and bulletin” shall refer to printed
materials in hard copies and shall not include those in digital or electronic format or
computerized versions, including but not limited to e-books, e-journals, electronic
copies, on-line library sources, CDs and software.
Statement 1 Statement 2
A. True True
B. True False
C. False True
D. False False
31. A lessor of residential units shall be exempt from vat when:
I. Annual gross receipts do not exceed P3,000,000
II. Monthly rental per unit does not exceed P15,000
A. I only B. II only C. Either I or II D. Neither I or II
32. A lessor of commercial units shall be exempt from vat when:
I. Annual gross receipts do not exceed P3,000,000
II. Monthly rental per unit does not exceed P15,000
A. I only B. II only C. Either I or II D. Neither I or II
33. Which of the following is subject to vat?
A. Sale of vegetables in its original state C. Sale of copra
B. Sale of fruits in its original state D. Sale of olive oil
34. One of the following is goods is not in its original state
A. Salted eggs C. Polished or husked rice
B. Corn girts D. Refined brown sugar
35. One of the following is not a poultry for VAT purposes
A. Duck B. Fowl C. Goose D. Fighting cock
36. One of the following is not a livestock for VAT purposes
A. Rabbit B. Cow C. Pig D. Race horse
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37. Which of the following transactions is subject to value-added tax?
A. Services subject to other percentage tax
B. Educational service duly approved by Department of Education, CHED and TESDA or those operated
by the Government.
C. Sale of coal and natural gas
D. None of the above
38. Which of the following shall be exempt from value-added tax?
I. Sale by agricultural cooperatives, duly registered with the Cooperative Development Authority to
their members as well as sale of their products, whether in its original state or proceeds form, to
non-members
II. gross receipt from lending activities by credit or multi-purpose cooperatives duly registered with
the Cooperative Development Authority.
III. Sales of non-agricultural, non-electric, and non-credit cooperatives duly registered with the
Cooperative Development Authority where the minimum contribution requirement is P50,000.
A. I and II only B. I only C. II and III only D. I, II and III
39. Which of the following transactions is exempt from value-added tax?
A. Sale of books, newspaper and magazines C. Sale of musical composition
B. Sale of literary works D. All of the above
40. All of the following except one, are subject to VAT
A. Importation of radio and television equipment by broadcasting and television stations.
B. Lease of cold storage rooms in ice plants and cold storage
C. Sale of painting
D. None of the above
41. Which of the following transactions is exempt from value-added tax?
A. Medical services such as dental and veterinary services rendered by professionals.
B. Legal services.
C. Services arising from employee-employer relationship.
D. Services rendered by domestic air transport companies.
42. Which of the following shall be subject to vat?
A. Sale of residential house and lot by the owner for P5,000,000.
B. Sale of a private car by its owner.
C. Sale of commercial property by a real estate dealer for P1,500,000.
D. All of the above.
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43. Which of the following receipts for 2018 current year from lease of residential units is subject to vat?
I. Monthly rentals per unit-P14,000; Aggregate annual rent-P3,150,000
II. Monthly rentals per unit-P18,000; Aggregate annual rent-P3,800,000
III. Monthly rentals per unit-P18,000; Aggregate annual rent-P3,000,000
IV. Monthly rentals per unit-P20,000; Aggregate annual rent-P4,000,000
A. II and IV only B. III and IV only C. All of the above D. None of the above
44. True or false:
Statement 1: Sale of flowers, in its original state is exempt from vat.
Statement 2: Agricultural contract growers are subject to vat.
Statement 1 Statement 2
A. True True
B. True False
C. False True
D. False False
45. True or false:
Statement 1: Sales of drugs and medicines of pharmacy run by the hospital to outpatients are subject
to VAT.
Statement 2: Agricultural contract growers are subject to vat.
Statement 1 Statement 2
A. True True
B. True False
C. False True
D. False False
46. Which of the following importation is subject to VAT?
A. Importation of frozen meat C. Importation of apples for personal consumption
B. Importation of bamboo poles D. Importation of grapes for sale
47. Which of the following subject to VAT?
A. Sale of smoked fished C. Sale of shells and coral products by a dealer
B. Sale of lechon D. Sale of newspaper
48. One of the following is not activity subject to VAT
A. Sale in retail of goods by a dealer C. Sublease of real property in the course of business
B. Sale of bamboo poles by a dealer D. Importation of ordinary feeds for poultry chicken
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49. True or false:
Statement 1: The sale of gold to Bangko Sentral ng Pilipinas (BSP) is subject to VAT at zero-rate.
Statement 2: The sale of drugs and medicines prescribed for diabetes, high cholesterol, and
hypertension shall be exempt from VAT beginning January 1, 2019.
Statement 1 Statement 2
A. True True
B. True False
C. False True
D. False False
50. This shall be considered a livelihood activity only and shall not be considered doing business, if the
gross sales or receipts in one year does not exceed
A. 100,000 B. 550,000 C. 200,000 D. 60,000
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