Taxation. Reviewer and Quizzer PERCENTAGE TAXES 1. The percentage taxes in the National Internal Revenue Code are: (a) 3% percentage tax on persons who are exempt from the value- added tax because their gross annual sales or receipts do not exceed one million nine hundred nineteen thousand five hun- dred pesos (P4 ,919,500), and who are not required to pay any other percentage tax; (b) Tax on domestic carriers; (c) Tax on internationai carriers (c) Franchise tax; (d) Overseas communications tax; (e) Tax on banks and non-bank financial intermediaries with qua- si-banking activities; (f) Tax on other non-bank financial intermediaries; (g) Tax on life insurance companies; (h) Tax on agents of foreign insurance companies; (i) Amusement tax; (j) Tax on winnings; and (k) Tax on stock transactions. (See next page.) 2. The basic rule: Those who are subject to the percentage tax/es are not subject on the same business to the value-added tax. however, a registered taxpayer may have two fines of activities, one of which is subject to the value-added tax, and the other subject to.a percentage tax. 3. A percentage tax is not an indirect tax because the law does not allow the seller to shift the tax to the buyer. One cannot see in a sales invoice an additionai item for percentage tax. But this is more apparent than real. Actually, a seller's selling price has a built-in recovery of percentage tax on the sale. 4, (a) Percentage taxes are imposed on sales of services, except the 3% percentage tax, which may be on services or goods; (b) Percentage taxes are paid by the service provider, except the overseas communications tax (and on outgoing monenge® only) which Is paid by the user-of the communication facilities (buyer of the services);tion: Reviewer and Quizze, 23-2 Taxal r Summary of the percentage taxes Gross sales! A. 3% percentage tax Bees vecainle oy, B. Domestic common carrier's tax (from ane passengers); International carrier's tax C. Franchise tax on: Gross receipts Gas and water facilities . 287, Radio and/or broadcasting companies Gross receipts whose gross receipts in the preceding J year did not exceed P10,000,000 ? | 3% ©., Overseas communication tax Amount paid 10%~ al 5 E, Tax on banks and non-bank financial in- Gross receipts from 1% termediaries performing quasi-banking lending/financial and functions leasing 5% Gross receipts from other gross income Items 7% Dividends 0% F, Tax on other non-bank financial inter- Gross receipts from 1%. mediaries » | tending/financial and ieasing 5% Gross receipts from other gross income items 5% G__Tax on insurance companies - Premiums collected 2% H. Tax on agents of foreign insurance companies Premiums collected 4% | Amusement taxes on: Boxing exhibitions Gross recei i Professional basketball games Gross facsibte 13% Cockpits, cabarets and night clubs Gross receipts 18% - Jairalai and race tracks Gross receipts 30% ~ J. Tax on winnings: ‘On winnings or dividends of persons In horse races or jai-alai but if from double, forcast, quinella Wepings we and trifecta bets Winni 4% (On winnings of owners of winning oe horses Winnings 10% K. Stock transaction tax (secondary % of offerin a) Selling price 1%“ L. Initial offering resulting in public control Up to 25% Over 25%, but not 33- 1/3% eetine price on Over 33-1/3 Selig ores ing priceTaxation: Reviewer and Qui ING Quizz er 23-3 c) Perc ) entage taxes are based on gross receipts except?” (1) The leotoa hot insurance, which is based on premiums col- é S money; er in money, notes, credits, or any substitute ) ee transactions tax, which is based on the selling A receivabie, aithou i na a a gh income from it is earned aiready, is Cot yet taxable. There are no deductions from gross receipts arrive at the taxable gross receipts. + Which statement is wrong? a tbe percentage taxes are basically on sales of services; (b) ile percentage taxes are paid monthly; (c) The percentage taxes are not allowed by law to be shifted to the cus- . tomers or clients; 7 (d) An isolated transaction not in thie course of business shall liability for a percentage tax. faire. mtiy be sibycitd t result ina Answer: d f The percentage taxes are basically on sale of services (although the 3% percentage tax may be on sale of goods). One isolated transaction may be subject to a kind of percentage tax. For example, a sale thru a local stock exchange of shares of stock of a domestic corporation by a person other than a dealer in securities, though an isolated transaction, and therefore, does not constitute doing business, is subject to the stock transaction tax of 4/2 of 1%, to be withheld by the stock broker. Tax on winnings may be on an isolated occurrence. Overseas communication may be once only, and yet there shall be a percentage tax + Which of the following is not true? The percentage tax: (a) Isataxona sale of services, (b) May be imposed on a sale of goods; ((c) May be imposed together with the value-added tax; Cv, (d) May be imposed together with the excise tax. wer: C a percentage tax ‘of 3% may be imposed on sale of goods (If the tax- payer's gross sales oF receipts did not exceed one million five hundred thou- ey pesos [P 1,500,000] in the preceding year) 5. The Three Percent (3%) Percentage Tax. The tax is imposed on those who are exempt from the value- added tax under Section 109 (v) ~ their sales in the preceding year did not exceed one million nine hundred nineteen thousand five hundred pesos (P1,919,500). But although exempt from the may choose to be under the VAT system. If Iue-added tax, they they choose to be under the VAT system, they shall register as23-4 Revenue, and the rules Taxation: Reviewer and Quizzer | les, domestic as well as | f Internal VAT taxpayer with the Bureau 0} rT on Value-added tax shall apply on their sal exports. les of P1,919,500 in any year. Purchases were | + 0 Co, never exceeded sales of PA SIE.SOE Tt 2 ot included from VAT-registered taxpay P300,000 Sales, exports 220,000 Sales, domestic 432,000 Purchases, for exports 98,000 Purchases, for domestic sales __ 991 Percentage tax if its line of items handled are general merchandise items and it did not choose to be VAT registered for 20137 , ((a) P15,600, (b) P9000; (c) P6600, + (d) Some other amount. SOO 17K 0% c 5606 ARGNOE IA ( 47x5 009) ¥ I Gross annual sales do not exceed the benchmark of P1,919,500. Net value-added tax refundable, if its line of items handled are general merchandise items and it chose to be registered under the VAT system? (a P1,320, (b) P15,840; (c) P26,400; + (d) Some other amount. Answer a isqdo - 145962 Percentage tax if Q Co. was not VAT-registered: Sales, exports P300,000 Sales, domestic 220,000 Total 520,000 3% of P520,000 P 15,600 Net value-added tax refundable if Q Co. was VAT-registered: Input taxes attributable tc goods exported (P132,000 x 12%) P15,840- Value-added tax payable on domestic sales — Output taxes (220,000 x 12%) 26,400 Less: Input taxes (P99,000 x 12%) 41,880 14,520 “ Net value-added tax refundable P1320 9 The Common Carrier’s Tax. The following are subject to the Percentage tax known as “Common Carrier's Tax” (a) Cars for rent or hire driven by the lessee (rent-a-car); {b) Transportation contractors, including persons who transport passengers for hir {c) Other domestic carriers by land for their transport of passen- gers, except owners of animal-drawn two-wheeled vehicles; abana aGishisiaahTaxation: Reviewer and Quizzer (d) Keepers of garages, Because not all ¢ customers, the certain common c. (Example: Jeepney: ‘ommon carriers issue receipts to pass law Provides for minimum gross rec ‘arriers, and imposes the tax on that amount '$) — See Appendices. Qn domestic common carriers: Value-added tax or Percentage tax?* Common carriers on land: i Transporting goods or cargoes Value-added tax of 12% Transporting passengers Percentage tax of 3% Common cairiers by air or $0 From one point in the Philippines to another point in the Philippines: ‘Transporting goods or cargoes Value-added tax of 12% Transporting passengers Value-added tax of 12% Common carriers by air or sea: From one point in the Philippines to a point outside the Philippines: L Transporting goods or cargoes Value-added tax of Transporting passengers. ; Value-added tax of 0%) ~~ * See list of services subject to value-added tax in the Appendices. * One of the following is wrong: Operators of transport facilities are: _ ((@) Subject to the value-added tax on gross receipts from transporting pas- \— ‘sengers; zoy ; (b) Subject to the value: | gross receipts from transporting goods and cargoes; : Subject to percentage tax on gross receipts from transporting pas- sengers; (d) Subject to value-added portation facilities. / ded tax (c) tax on gross receipts from renting out its trans- Answer: & * Revenues of the current period P400,000 Collections during the period: S ‘ i 50,000 venues of prior periods of revenues of the current period 7 300,000 Of revenues of the succeeding period (advances) 10,000 ff carrier of passengers: Business tax if adomestic common ie 8 (@) P12,000; _(b)P22,800; ©) 10,800; (d) P21,000. Answer: ¢23-46 Collections during the period: Of revenues of prior periods Of revenues of the current period Advances Taxable gross receipts Common carrier's tax (P360,000 x 3%) Taxation: Reviewer and Quizzer P 50,000 300,000 40,000 360,000 P 10,800 - * D Co. is a common carrier with passenger buses and cargo trucks. For the month of June, 2013, it had the data on revenues and receipts, taxes not included: For transporting passengers, gross revenues and receipts of P330,000;_ For transporting cargoes. aross revenues of P220,000, of which. P2( was received; hy For renting out to the MMDA its towing trucks, gross receipts of P50,000, presenting P10,000 from gross revenues of the quarter ending Marc! 000) re- and P40,000 for the month of June. Vf | Percentage tax? a. P17,400; b. P9,900; cc. P16,500; Answer: b eas eacy Output value-added tax? (a) P24,000; () P30,000; (c) P20,000; Answer: b Gross receipts for transporting passengers Percentage tax (common carrier's tax) at 3% d, P15,900. 6& = 9G Sr (d) P25,000. 330,000 P 9,900 Note: Gross receipts from transporting cargoes shall be subject to value- added tax. as follows: Gross receipts for transporting cargoes Gross receipts from rent Total Output value-added tax at 12% . { * Atin Transport Co. is a common carrier Philippines. It had the following data ina month: ‘On iand carriers: Gross receipts from cargoes y i Gross receipts from Passengers ~ On Sea carriers: yxy Gross receipts from cargoes Gross receipts from passengers ‘The percentage tax? (@ P21,000; (b) P36,000; (c) P15,000; 160 C00Y 935 21090 200,000 $0,000 250,000 P 20.000 P geceg by land and sea within the 500,000 (o.o ) 900,000 1,000,000 (d) Some other amount.Taxation: Reviewer af : and Quizzer . 23-7 “Answer: a The output value-added t (a) P240,000; 1000, (6) (2) P240,000; (6) 120,000, ((c)/P288,000; (4) Some other amount. powers (ROMER Se 4 qlererae )X1n = dag Percentage tax on gross receipts from land cafriers on passengers: (P700,000 x 3%) P 21,000 Output value-added tax: Gross receipts from land carriers on cargoes P 500,000 Gross receipts from carriers by sea on cargoes 900,000 Gross receipts from carriers by seaon passengers 1,000,000 rotal 2,400,000 (12% of P2,400,000 268.000 * Sail-ho Inc. is a domestic corporation operating sea vessels that transport passengers and cargoes from one point in the Philippines to another point in the Philippines, or a point abroad. Data on operations of a month, any tax not included, follow: Gross receipts on cargoes: _/From points in the Philippines to points in the Philippines 1,000,000 (1 From points in the Philippines to points abroad 2,000,000 Gross receipts from passengers: From points in the Philippines to points in the Philippines 3,000,000 / 2) From points in the Philippine to points abroad 4,000,000 " “purchases of goods, supplies and services from VAT suppliers C §,000,000°5 Valye-added tax payable and value-added tax refundable? (a) 360,000; (b) P240,000; ((¢) P120,000 (d) Some other amount fundable ; / a Answer: ¢, reful Guam er 1,000,000 P2;000,000 From cargoes or From passengers 3.000.000 21000;000 en 4,000,000 6,000,000 Output taxes ' Pas0.000> li Ehases from VAT suppliers Paes 000 x 12% is PBO0,000 - 4’000,000/P 10,000,000 x 600,000 ~ 240,000 P6/000,000/P10,000,000 x P600,000 Ze VAT payable (refundable) p 2a0000 s 360,000 easy = The J Co. is a land transport operatc., In a month, it had gross receipts and ree vables and payments, any tax not included, that follow: pes Gross receipts from transporting passengers 4,000,001 - Gross receipts from transporting cargoes °5'000'000Taxation: Reviewer and Quizzer Receivables from transporting cargoes | . 2,000,000 y Proceeds from insurance policies on transportation units 800,000 x Amounts paid, any VAT or percentage tax not included: For repairs of transportation units ven {q 700.000 "hy _For materials used for repairs ; 2186 6 | 1,400,000 °/5 For premiums on insurance of transport units | 350,000 = hk _” _For operating expenses 1,600,000 The percentage tax payable? (a) P270,000; ((b) P120,000; *. (c) P150,000; (d) Some other amount. 4one ond, = 120065 Answer: b ‘The value-added tax payable? : (a) P252,000; ( (b) P234,000 (c) P354.000; (d) Some other amount. Answer: b Transporting of: Passengers Cargo Gross receipts P4,000,000 3,000,000 Output taxes (P3,000,000 x 12%) P 360,000 Less: Input taxes- For repairs (3/7 x P700,000 x 12%) (. 36,000) For materials (3/7 x P1,400,000 x 12%) 72/000) For premiums on insurance (3/7 x P350,000 x 12%) ‘ 8,000) 7 Value added tax payable P 234,000 Percentage tax payable at 3% P 120.000 7. The Franchise Tax. The following are subject to “franchise tax”, Gas and water utilities ) Radio and/or television broadcasting companies whose gross receipts of the preceding year did not exceed P41 10,000,000 (3%) (but may choose to be subject to the value-added tax) ws If the gross receipts in the pl receding year exceeded 10,000,000, the tax is the value-added tax. (Other franchise grantees are subject to the value-added tax on sale of Services (See list of services subject to the value-added tax in the Appendices). The franchise tax of 2% or 3% is on gross receipts from acti- vities covered by the franchise. Other gross receipts may be sub- ject to the value-added tax.Taxation: Reviewer and Quizzer “» ZCo. was Given a franchise to (ele 2 Kel island of Luzon, in a month, data on oc Gross receipts var oe goods and services VAT suppliers purchased from Payments for Business tax payable? (2)-P600,000; “((b) P132,000; (c) P240,000; _(d) None of the above. Answer: b, val . 20 W - gta en) x |z= veakinege OM peed) #1 Output taxes (P2,000,000 x 12%) Less: Input taxes (P900,000 x 12%) Value-added t ax payable Ge rodioy terrae? in the Calabarzon area in the ions, any tax not included, were: P2,000,000 900,000 60 * Y Co. was given a franchise to operate a radio and television station. 2013 was its second year of operations, in 2012, its gross receipts from operations wa: 1s P9,000.000. For January 2013, ithad: noT e~ Gross receipts, any tax not included - Payments to VAT-registered supplier of goods, supplies and services Business tax payable? (@)'P90,000; . (b) P36,000; (c) P144,000; (d) Some other amount. Answer: a, franchise tax (P3,000,000 x 3%) wd (0M 3,000,000 * As franchisee, Mr, Gaudencio Tomacruz had the following data on reve- nues and receivables, taxes not included: From operatior Receivables Revenues Beginning ns: ‘/Covered by the franchise 2,000,000 P300,000 Not covered by the franchise 600,000 ‘The percentage !ax, if operating @ water system: a 52,000; b)P38,000; c. P90,000, d. P190,000. i - ; Answer: b [Joo wr. 6h~ dim ‘ Se Receivables, beginning . Revenues during the period foe bles, end : Receivables, Gon receipts subject to franchise tax Franchise tax ( (P4,900,000 x 2%) End 400,000 80,000 Zn23-40 Taxation: Reviewer and Quizzer . anies has franchises on public_utilit Ss. P Co. is Tena Co, is in generating and selling electricity, and L Co. in distributing water in their franchise areas. The radio broadcasting is in ils first year of operations, and it did not register as a VAT taxpayer. Data in a particular month, any tax not included, follow: Gross receipts: P Co., for time sold to its clients 2,000,000 O Co., for electricity supplied to its customers U1. . 3,000,000 0. Co,, for leasing electrical equipment to a subdivision v/+( 900,000 1), LCo., for water supplied:to its customers : 2,900,000 / L.Co., for leasing recreation areas within its water filter sites 200,000 How much was the aggregate of.the franchise taxes paid? (2) P58,000; (b) PGO,000; ((c) P178,000; (¢) Some other amount. Answer'e — ( 2o0ccn'y 102), § ( 2qpoans ¥ a) =(ICor P Co. (P2,000,000 x 3%) P 60,000 L Co. (2,900,000 x 2%) P 58.000 Aggregate P 148. 8. The Overseas Communication Tax. The overseas communications tax is: (a) Imposed on the user of the communication facility (not on the operator of the communication facility); (b) Imposed on outgoing messages from the Philippines only; (c) The tax is (10% : On other services, the operata tof the communication facility is subject to the value-added tax. v/- * ‘Mr. Kis a businessman with transactions in and out of the Philippines. Local and overseas calls for a period involved (any tax not included): Overseas calls: ., For calls originating from the Philippines: \\’/Paid by the subscriber in the Philippines P65,000 Paid by the receiver of the call outside the Philippines 14,500 For calls coming into the Philippines: : Paid by Mr. K 15,000 Paid by callers 23,000 Local calls, paid by. ~ Op e.nrey Ahvededy VE Other than long distance mapas I 7,000 Long distance 000, Value-added tax billed to Mr. K? 2 ((a) P3,240, (b)P2,400; (c) P840; (d) Some other amount. >” Answer: a Doe Xf. x 3746Taxation: Reviewer and Quizzer 23-11 Percentage tax billed to Mr. K?, 0501 RR 5000 %-I6 = G60 (a) P9,200; (b) P8,500; {(c)/P6,500; (d) Some other amount. Answer: c Value-added tax billed to Mr. K: Other than long distance calls P 7,000 Long distance calls 20,000 Total P 27,000 Value-added tax at 12% P 3.240 Percentage tax (overseas communications tax) billed to Mr. K: For calls originating from the Philippines and paid by the subscriber in the Philippines P65,000 Percentage tax at 10% P 6,500 9. The Tax on Banks. The tax is known as “Gross Receipts Tax” of banks Banks are subject to percentage tax on gross receipts from within the Philippines, as follows: (a) On interest, commission and discounts from lending ac- tivities, as well as income from financial leasing, on the basis of the remaining maturities of instruments from which such receipts were derived: (1) If the maturity period is five (5) years or less 5% (2) If the maturity period is more than five years 1% (b) On dividend and equity shares in the income of sub- sidiaries 0% (c) On royalties, rentals of property, real or personal, profits from exchanges and all other items treated as gross income under the income tax law 1% (d) On net trading. gains on foreign currency, debt instru- ments, derivatives and other similar financial instru- nts Incase the maturity period is shortened thru preter- mination, the maturity period shall be reckoned to ‘end as of the date of pretermination. 7% + Statement 1: Banks are subject to the value-added tax; 0) ( Statement 2: Banks are subject to the gross receipts tax, which is a per- entage tax. 10 rs (a) True, true; (b) False, false; —_(c) True, false; (d) False, true. Answer: d * + X Bank, Ine, is a domestic bank operating in the City of Manila. From the fol-Taxation: Reviewer and Quizzer 23-12 lowing data in a month Rentats from safety deposit boxes and real property acquired through foreclosure proceedings for bad loans ; |, Net foreign exchange gains (difference between the value of foreigrs currencies soid and purchased) Net trading gains from trading of securities, commercial papers and other financial instruments (difference between the yield or selling price and the cost of obtaining the same) } Trust fees ‘ Dividends from domestic corporations | Other service fees Interest income from lending activities from instruments with remaining terms of: |. Five years and less 1 /, More than five years The percentage tax (gross receipts tax) for the month is: (a)P0, — ((b) P189,300; (c) P43,000; (4) P104,500. Answer: b Rentals P 880,000 Net foreign exchange gains 220,000 Net trading gain al instruments 680,000 Trust fees 110,000 Other service fees ‘220,000 Total 2,090,000 Percent: tax (P2,090,000 x 7%) Divider 11 domestiG corporation P 30,060 Percentage tax Percentage tax on interest income from lend- ing activities on instruments with maturities: Five years and less (P700,000 x 5%) P 35,000 More than five years (800,000 x 1%) 8,000 Total percentage tax / A domestic bank had the following data in a month: 7 Rentals from safely deposit boxes and real property acquired through mortgage foreclosures ‘} Service fees © Dividends and equity shares in the net subsidiaries peat Amounts received from lending activiti in cot anaiities ct ing activities on instruments -£ Five years and less 1 More than five years How much is the percentage tax forthe month? 880,000 220,000. 660,000 410,000 30,000 220,000 700,000 800,000 P146,300/ ov 43,000 ¥ P189,300 v P300,000 200,000 500,000 800,000 900,000 (a) P130,000, (b) P151,000; (c}}P165,000; (a) Some other amount. i 4Taxation: Reviewer and Quizzer 23-13 Answer: c On: Rentals Service fees 0,000 Total 500,000 (P500,000 x 7%) P 35,000 On amounts received from lending activities, On instruments with maturities of; i years and less (P800,000 x 5%) P 40,000 lore than five years (P900,000 x 1%) , (/ (90.000) 430,000 Percentage tax for the month vo] 165,000 10. Tax on insurance companies. Life insurance companies are subject to a percentage tax of two percent (2%) of their gross receipts, whether in money, credits or any substitute for money. Non-life insurance companies are subject to the value-added tax on _gross receipts — cash actually or constructively received. Exempt from the tax on iife insurance premiums are: {a) Premiums refunded within six months after payment on account of rejection of risk or returned for other reasons to a person insured; {b) Reinsurance premiums paid by a company that has already paid a tax. + The N insurance Co., with life and non-life insurance business, had the following data on premiums and expenses for a month: Life insurance business, on premiums: ye ish received 520,000 f " Aan ne rooeivable 365,000 ] Nog ae6 Post-dated checks 315,000~ Nonvlife insurance business, on premiums: Cash received, including VAT of P96,000 896,000 Accounts receivable ° 342,000 payments on operational expenses, including rentals, al rat to VAT-registered person tax payable’ ( Orzaoee, 0) P67,200; (c) P91,200; (d) Some other amount. ‘Answer: a gG0eg Fea ~ 14696 ded tax payable? to P24,000; 7b) P67, 200; (c) P91,200; —(d) Some other amount. 000 ure Nor-lfe wusoey ttn : ’ A) cane 2 LA fonTaxation: Reviewer and Quizzer 23-14 P8900, Cash received Pp pete '800,000 Accounts receivable Een Post-dated checks pees Total premiums received 1,200,000 ais aod Output taxes (896,000 x 12/112) 5, Less: Input taxes (P672,000 x 12/112) is P72,000 P800,000/P2,000,000 x P72,000 ‘3 28.800 Value-added tax payable r 67.200 Percentage tax (P1,200,000 x 2%) P 24,000 441. The Amusement Tax The amusement taxes are on gross receipts from: 2 Boxing exhibitions | 410% Professional basketball games (which shall be in lieu of all percentage taxes of whatever name and description) AB Cockpits, cabarets and night clubs ae Jai-alai and race tracks ? Gross receipts include incidental receipts, as gross receipts from television or satellite coverage, advertising streamers, sale of goods, etc. 7 Boxing exhibitions where World or Oriental Championships in any division is at stake shall be.exempt from amusement tax: {a) If one of the contenders is a citizen of the Philippines; and (b) The exhibitions is promoted by a citizen of the Philippines or by a corporation or association at least sixty percent (60%) of the capital of which is owned by such citizens. + The Z Co. is a sports promoter, a 100% Filipino corporation, that owns a sports arena. In a month, it promoted, and had gate receipts, from the following iniemational competitions: . Ping-pong » 1,000,000 |, _ Basketball (professional) 2,000,000 Boxing (World heavyweight Championship, with a Eilipino asa defending champion) fi nip 2,500,000 Volleyball * “600,000 Tennis * 1,400,000 Satellite coverage gave the company gross receipts of P1,500,000 in each event, and advertising streamers gave it gross receipts of P200,000. in each event Ambulant vendors within the arena, also provided by the com- pany, gave it gross receipts in each event of P250,000. _How much is the percentage tax for the month? \(@) 892,500; (b) P395,000; (c) P30,000; (d) Some other amount. (reo 20 biteeeh g Frocuee kate ocd } AG = 592,509Taxation: Reviewer and Quizzer 23-15 Answer. a From professional basketball games: Cress receipts from gate 2,000,000 ross receipts from satellite cove “500, Gross receipts from advertisers nee 300000 Gross receipts from ambulant vendors 250.000 Total gross receipts $50,000 $00 Amusement tax at 15% P ae $00 . plished ict Inc. is a sports promoter which leases the Manila Colseur at a monthly rental of P800,000. It conducts boxing exhibitions and professional basketball games in the coliseum-4n-a month, it had the felewing gross receipis from professional baskeiali games: Gate receipis as ro ‘Sales of food at stands maintai it in the coliseum - 300,000; Sale of television rights - P1,00 PS ig 000,000. The rent expense is The percentage tax is: a, P1,035,000, b. P936,000; 750,000; _d. None of the above. ae ( cove 60° £0 CCE F (6Ge C00} Gate receipts Sales of food at stands Sale of television rights Taxable gross receipts Amusement tax (P6,900,000 x 15%) + Mr. Lis a restaurant and nightclub operator. In a taxable period, he had the tax not included: | { * | following data, any Sales: From operations of the “Gourmet's Place’, a restaurant: Cash sales | _/P 400,000 Accounts receivable (catering) 250,000 243,000 Credit card sales ee operations oft a ry | Cash sales 1,360, 1) | Credit card sales “624,200 964" Payments: - s, based on gross rec’"pts (80% of which are to the “Dreamboat”, a.night club: For operation: ayers) . 60% Malue-added tax payable? ((ayP40,123; () 357.156; (c) P2.3,780, (4) Some other amount, fe oh ‘Answer. @ Bor Percentage tax (amusement, tax) payable? TeTaxation: Quizzer and Reviewer 23-16 4907.12 ie ” 7 ther amount. (a) 40,123, ((0) P357,158 (©) p256,780, (4) Some ol Answer Gourmet's Place Dreamboat 400,000 P1,360,000 aot oon 243,000 624,200 Credit card sales ooeS p.s6¢200 Taxable sales ee —— Output taxes (P643,000 x 12%) P 77,160 Less: Input taxes — Operating expen: 60% of (P40 VAT-paid expenses 80% of P385,800 VAT payments on expenses 12% of P308,640 37,037 Value-added tax payable P 40123 Percentage tax at 18% P 357,156 + Revenues of the current period . P600,000 Collections during the period: | fi | Of revenues of prior periods : 80,000 Of revenues of the current period 400,000 | Sat Of revenues of the succeeding period (advances) 20,000 300; (2) P90, 000, (d) P21,000. Business tax if a.night cl (a) P12,000; (b) P2: Answer: ¢ 5 Collections during the period: Of revenues of prior periods Of revenues of the current period Advances Taxable gross receipts ‘Amusement tax (P50U,000 x 18%) + Revenues of the current period sq’ |e Collections during the pened Een ‘© Of revenues of prior periods 4,000,0007 |, Of revenues of the current period 4,000,000 | {1 Of revenues of the succeeding period (advances) "120,000. Business tax if a race track? : (a) P2.856,000; “(b) P1,500,000; (@),528.000 (a) P1,200,000. Answer. c. Taxation: Quizzer and Reviewer Collections during the perioa; Of revenues of prior periods Of revenues of the current period Advances Taxable gross receipts Amusement tax (P5,120,000 x 30%) 23-17 P1,000,000 4,000,000 420,000 P5,120,000 4,536,000 + Mr. A is a hotel operator. Purchases of goods and services from VAT- registered taxpayers amounted to total that follow do not include taxes: From room occupancy For use of hotel gym For rent of garden for a garden party From the dining hall: Sale of food Sale of alcoholic beverages From the disco: For admission to the disco > | {| From the concessionaire who furnishes food |) |. and alcoholic beverages at the (whose gross receipts from sales is P800;000) Total percentage taxies of Mr. A: a. P345,540; b. P190,000; ¢, P208,200; Answer: d aOOGE TL = | Gross receipts from admission to the disco- Gross receipts from the concessionaire Total Amusement tax (P730,000 x 18%) Note: > Gross receipts from - Room occupancy Use of hotel ym Rent of garden for a garden party Dining nal Sale of food Sale of alcoholic beverages ble gross receipts hall be Sipject to the value-added tax thus: Output taxes (P1.073,000x 1236) Less: Input taxes (P336,000 x 12/112 Value-added tax payable, \—~ + Cash received on winnings in a Revenues P400,000 30,000 20,000 500,000 200,000 250,000 00,000 Collection 350,000 28,000 20,000 480,000 195,000 250,000 Z 480,000 250,600 480,000 P730,000 P131,400 P 350,000 28,000 20,000 480,000 195,000 41,073,000 .P 128,760 P $2,760Taxation: Quizzer and Reviewer 23-18 net of bet on the game, and net of withholding tax Pea on winnings : tage tax withheld? How much was 6 PeaD, (d) Some other amount. (a) P8,000, (b) P7,680, (c) P7,200; Answer @ IN yoy 2g 4 ee Cash received ‘ aid (96%) - P192,000 Winnings before percentage tax withhel (P192,000/96%) 200,000 Percentage tax (tax on winnings withheld © ee (P200,000 x 4%) Sy 42. The Stock Transactions Tax The percentage tax, known as the “Stock Transaction Tax” is im- posed: ; (a) On a sale, barter, exchange or other disposition of (shares) listed and traded thru a local stock exchange, other than by a dealer in securities, based on the gross selling price or gross value in money of the shares sold, bartered, exchanged or otherwise disposed of, at one-half of one percent (4 of _1%)}, to be paid by the seller; and (bj On a sale, barter or exchange or other disposition thru initial public offering of shares of stock of a closely-held corpo- ration, in accordance with the proportion of the shares sold, bartered, exchanged, or otherwise disposed of, to the total outstanding shares after the listing in the local stock ex- change, as follows: Up to twenty-five percent (25%), 4%; Over twenty-five percent (25%) but not over thirty-three and one- third percent (33-1/3%), 2%; Over thirty-three and one-third (33 113%), 1%, to be paid by the issuing corporation in prima- ry Offering and the seller in secondary offering. A “closely-held corporation” means any corporation at least fifty percent (50%) in value of the outstanding capital stock or at least fifty percent (50%) of the total combined voting power of all classes of stock entitled to vote, is owned directly or indirectly by or for not more than twenty (20) individuals. + The taxpayer is not a dealer in securities, with the following sales of shares of stock of domestic corporations in the Philippine Stock Exchange: Shares of A Co., on a’selling price of P1,200,000, on* February 6, 2013, and cost of P400,000. for a gain on the sale of - ~ Shares of A Co., on ageliing a price of P600,000, on 800,000 gseeTaxation: Quizzer and Reviewer 23-19 February 11, 2013, and a cost of P720,000, for a loss on the sale of (elles 120,000 Shares of 8 Co., on a-sélling price of 920,000 on February 25, 201 3Sanc-a-cost of P950,000, for a loss on the sale of Aggregate of the stock transaction tax? . (@).P6,000; (by P7,600: ( 1913, 300; (d) Some other amount: Answer: ¢ 30,000 (1200 006 + eaveac F200 ) x ox 1p, On the sale of February 6, 2013, of A Co. shares (P1,200,000 x 1% x %) On the sale of February 11, 2013, of A Co, shares (P600,000 x 1% x %) : ; On the sale of February 15, 2013, of B Co, shares (P920,000 x 1% x %%) Aggregate + The X Co., a Closely-held corporation, was permitted to increase its authorized capital stock and make an initial public offering for an ag- gregate selling price of P4,000,000, The proportion of ownership, after the 7, YY initial public offering would be as follows: 3 ‘- To the original stockholders cS on 1 h To the new stockholders 30%) ; How much is the-stock transaction tax of X Co? = { h (a) P40,000; te) 80,000; (c) P160,000; (d) Some other amount. : Wi even ong Oc K-0L> Foece, P4,000,000 x 2% P80,000 + Statement 1. The percentage taxes should be paid within twenty (20) days “ after the close of the month. ; Statement 2. There can be a withholding tax on a payment which shall be subject to a percentage tax on the recipient. + ( (a)jTrue, true; (b) False, false; —_(c) True, false; (d) False, true. Ly Answer: @ .