Output VAT (P2,800,000 x 12%) P 336,000

Less: Input VAT

Regular input VAT P 51,600
Presumptive input VAT 48,000 99,600
VAT payable P 236,400

Note:
1. There is no actual input VAT on copra, a coconut product, but the law imputes or allows
a presumptive input VAT on it as an incentive.
2. The activated carbon is an industrial processed product, not an agricultural input.

Illustration 2: Processor of sardines

Sardinas Corporation processes hot chili-flavored sardines. During the month, Sardinas
purchased the following ingredients for the processing of canned sardines.
Cost Input VAT
Fresh sardines P 800,000 -
Hot chili 50,000 -
Tomatoes 400,000 -
Ordinary salt 20,000 -
Tin can 120,000 P 14,400
Labels 60,000 7,200

The presumptive input VAT shall be computed from the agricultural purchases as follows:

Hot chili P 50,000

Tomatoes 400,000
Ordinary salt 20,000
Total agricultural purchases 470,000
Multiply by: 4%
Presumptive input VAT P 18,800

Note:
1. Sardines, including mackerel, are marine products, not agricultural products. The presumptive input VAT,
a tax credit, shall be construed against the taxpayer.
2. Ordinary salt is an agricultural food product in original state (RR16-2005).
3. The regular input VAT on the tin cans and labels are claimable in the month of purchases separate from the
P18,800 presumptive input VAT which shall likewise be claimed in the month of purchase.

Illustration 3: Processor of refined sugar for others

Sugarie Corporation operates a sugar refinery for clients. During the month, it processed
P10,000,000 worth of sugarcane and produced P40,000,000 worth of sugar. Sugarie charges 10%
of the production as processing charge.

Sugarie Corporation cannot claim presumptive input VAT because it does not own the sugar it
processes. Sugarie shall be subject to 12% VAT on its processing fees. If Sugarie produces raw
sugar, its processing fees shall VAT be exempt from VAT.
STANDARD INPUT VAT

The sale of goods and services to the government or any of its political subdivisions,
instrumentalities or agencies, including government-owned and controlled corporations
(GOCCS) is subject to a 5% final withholding VAT based on the gross payment.

The government, instrumentalities, agencies or GOCCS shall withhold the final VAT before
making the payment and remit the same within 10 days following the end of the month the
withholding was made.

The 5% withheld final VAT shall be deemed the actual VAT payable of the seller. Due to the
final withholding VAT, the sellers to the government, instrumentalities or agencies including
GOCCS can effectively claim only 7% of sales as input VAT. This is called the "standard
input VAT."

The actual input VẤT on the sale to government would have to be increased or decreased to
conform to the amount of the standard input VAT. The adjustment is closed to expenses or loss
or income or gain.

Illustration 1
A VAT taxpayer made a P100,000 sales to the government invoiced at P112,000 inclusive of
output VAT. The taxpayer purchased the same for P90,000 exclusive of P10,800 input VAT.

The government will withhold P5,000 (i.e., 5% of P100,000) and release the P107,000 net
proceeds of the sale to the taxpayer. The P5,000 withheld is presumed the actual VAT payable of
the seller.

Hence,

Output VAT P 12,000

Less: Standard Input VAT (7%) 7.000
VAT Payable (5% withheld final VAT) P 5,000

The difference between the actual input VAT and standard input VAT is disposed as follows:

Actual Input VAT (amount to be claimed) P 10,800

Less: Standard input VAT (amount allowable) 7,000
Loss or addition to expenses P 3,800

Journal Entry Method

This can be conveniently analyzed by accounting entries as follows:

Purchase P 90,000
Actual input VAT 10,800
Accounts payable/cash P 100,800
To record the purchase
 Cash/Receivable P 107,000
Final VAT withheld (5% x P100K) 5,000
Sales P 100,000
Output VAT 12,000
To record the sale to the government

Output VAT P 12,000

Income & Expense summary (loss) 3,800
Final VAT withheld P 5,000
Actual Input VAT 10,800
To close the VAT accounts

Illustration 2
A VAT taxpayer purchased goods for P10,000 plus P1,200 input VAT. It sold the goods for
P100,000 to a government agency. The sale was invoiced at P112,000 inclusive of P12,000
output VAT.

The difference between the actual input VAT and standard input VAT is disposed as follows:

Actual Input VAT (amount to be claimed) P 1,200

Less: Standard input VAT (amount allowable) 7,000
Gain or deduction to expenses P 5,800

Journal Entry Method

This can also be conveniently analyzed by accounting entries as follows:

Purchase P 10,000
Actual input VAT 1,200
Accounts payable/cash P 11,200
To record the purchase

Cash/Receivable P 107,000
Final VAT withheld (5% x P100K) 5,000
Sales P 100,000
Output VAT 12,000
To record the sale to the government

Output VAT P 12,000

Final VAT withheld P 5,000
Actual Input VAT 1,200
Income & Expense summary (gain) 5,800
To close the VAT accounts

What if the seller is a non-VAT registered seller?

The government or GOCC shall withhold a 3% final percentage tax on the sale before payment.

Future transition
The final withholding system on the sales to the government and GOCC will be abandoned
effective January 1, 2021 in favor of the tax creditable withholding system. This would mean the
elimination of the 7% standard input VAT in favor of full creditability of input VAT on
government or GOCC sales.

INPUT VAT CARRY-OVER

The input VAT carry-over is the excess of the input VAT over the output VAT in a particular
month or quarter. It is the VAT Overpayment that appears after tax credits and payments are
deducted against the net VAT payable.

Rules on Input VAT carry-over

1. The input VAT carry-over of the prior quarter is deductible in the first month of the
current quarter.
2. The input VAT carry-over in the first month of the quarter is deductible in the second
month of the quarter.
3. The input VẤT carry-over in the second month of a quarter is not deductible to the third
month of the quarter.
4. The input VẤT carry-over of the prior quarter is deductible in the third month quarterly
balance of the present quarter.

Illustration 1
The following data relates to the regular sales of a VAT taxpayer:

Output VAT Input VAT

Prior quarter P 350,000 P 390.000
Current quarter:
1st month of current quarter P 120,000 P 100,000
2nd month of current quarter 150,000 145,000
3rd month of current quarter 220,000 70,000
P 490,000 P 315,000

The credit rules of the input VAT carry-over shall be applied as follows:

Table

The taxpayer will not pay VAT in the prior quarter, first month and second month of the quarter
since there is a negative VAT payable. The taxpayer shall pay P135,000 VAT in the third month
of the current quarter.
Note:
1. The P40,000 input VAT carry-over in the prior quarter is creditable in the first month of the current year.
2. The P20,000 input VAT carry-over in the first month of the current quarter is creditable in the second
month of the current quarter.
3. The P15,000 excess input VAT in the second month cannot be carried over to the third month quarterly
balance. Instead, the P40,000 deferred input VAT carry-over in the preceding quarter is credited in the
current quarterly balance.
Illustration 2
The following data relates to the regular sales of a VAT taxpayer:

Output VAT Input VAT

Prior quarter P 360,000 P 400,000
Current quarter:
1st month of current quarter P 160,000 P 100,000
2nd month of current quarter 150,000 160,000
3rd month of current quarter 170,000 65,000
P 480,000 P 325,000

The credit rules of the input VAT carry-over shall be applied as follows:

Table

Note:
1. The P40,000 input VẤT carry-over in the prior quarter is deductible in the first month of the following
quarter.
2. The taxpayer shall pay the P20,000 VAT payable in the first month. The P10,000 excess input VAT in the
second month cannot be carried over to the third month.
3. The P40,000 input VẤT carry-over in the prior quarter is deductible in the third month of the current
quarter.
4. The VAT paid in the first two months of the quarter is deductible in the quarterly balance. Hence, the
P20,000 VẤT paid in the first month is deducted in the quarterly VAT payable.

WHAT ARE EXCLUDED FROM INPUT VAT CARRY-0VER?

1. Advanced VAT which have been applied for a tax credit certificate
2. Input VẤT attributable to zero-rated claim which have been applied for a tax refund or
tax credit certificate
3. Input VẤT attributable to zero-rated sales that expired after the two-year prescriptive
period

The rules of advanced VAT will be discussed in the succeeding chapter.

RULES ON CLAIM FOR CREDIT OF INPUT VAT

1. Specific identification - input VAT that can be traced to a particular sales transaction is
credited against the output VAT of such sales
2. Pro-rata allocation - the amount of input tax due or paid that cannot be directly and
entirely attributed to any one of the sales transactions shall be allocated proportionately
on the basis of sales

Illustration 1 - Specific Identification

A VAT taxpayer had the following sales with their corresponding directly traceable input VAT
during the month:
 Sales amount Input VAT
Sales to private entities P 900,000 P 60,000
Export sales 300,000 36,000
Sales to government 250,000 24,000
Sales of exempt goods 100,000 2,000
Total P 1,550,000 P 122,000

The Creditable Input VAT may be computed directly as:

Input VAT on private sales P 60,000

Input VAT on export sales 36,000
Input VAT on government sales (7% x P250, 000) 17,500
Total allowable (creditable) Input VAT P 113.500

Input VAT deductible against gross income through costs and expenses:

Input VAT on exempt goods P 2,000

Excess input VAT (government) (P24,000 - P17,500) 6,500
Total P 8,500

Illustration 2 - Non-traceable input VAT

A taxpayer engaged in merchandising had the following transactions during the month:

Exempt sales P 200,000

Export sales 300,000
Sales to government 100,000
Regular sales 400,000
Total P 1,000,000

During the month, the taxpayer had P124,000 total input VAT that cannot be traced to a
particular transaction.

The non-traceable input VAT shall be allocated as follows:

Sales Allocation Allocated

Amount Factor Input VAT
Exempt sales P 200,000 P200K/P1M x P124,000 = P 24,800
Export sales 300,000 P300K/P1M x P124,000 = 37,200
Sales to government 100,000 P100K/P1M x P124,000 = 12,400
Regular sales 400,000 P400K/P1M x P124,000 = 49,600
Total sales P 1,000,000 P 124,000

The creditable input VAT shall be:

Input VAT allocable to export sale P 37,200

 Standard input VAT (P100,000 x 7%) 7,000
Input VAT allocable to regular sales 49,600
Total P 93,800

Illustration 3 -With Non-Traceable Input VAT

A taxpayer had the following sales during the month:

Sales Traceable
Amount Input VAT
Exempt sales P 200,000 P 12,000
Regular sales 300,000 18,000
Total P 500,000 P 30,000

There is a P24,000 input tax that cannot be traced to either type of transaction.

The creditable input VAT shall be:

Input VAT directly traceable to vatable P 18,000

sales
Allocated input VAT to vatable sales
P300,000/P500,000 x P24,000) 14,400
Total allowable (creditable) input VAT P 32,400

COMPUTATION OF THE ALLOWABLE OR CREDITABLE INPUT VAT IN THE VAT

RETURN

In practice, the allowable (creditable) input VAT is computed and presented in the VAT return as
follows:

Input tax carry-over, from previous period P XXX,XXX

Deferred input tax on capital goods exceeding P1M XXX,XXX
Transitional input tax XXX,XXX
Presumptive input tax XXX,XXX
Regular input VAT from:
Purchases of capital goods not exceeding P1M XXX,XXX
Purchase of capital goods exceeding P1M XXX,XXX
Domestic purchases of goods, other than capital goods XXX,XXX
Importation of goods, other than capital goods XXX,XXX
Domestic purchases of services XXX,XXX
Services rendered by non-residents XXX,XXX
Others XXX,XXX
Total available input tax P XXX,XXX
Less: Deductions from input tax
Input tax on capital goods, deferred for future periods P XXX,XXX
Input tax on sales to gov't closed to expense XXX,XXX
 Input tax allocable to exempt sales XXX,XXX
Input VAT claimed as refunds/TCC XXX,XXX
Others XXX,XXX
Total allowable (creditable) input tax P XXX,XXX

Illustration
A VAT taxpayer had the following data during the month:

Sales to regular customers P 4,000,000

Sales to the government 1,000,000
Export sales 3,000,000
Exempt sales 2,000,000
Total sales P10,000,000

Input VAT
Input VAT carry-over, from prior period P 80,000
Deferred input tax (already amortized for 21/36 months) 75,000

Current month transactions:

Purchase of goods or services P 7,000,000 P 840,000
Importation of equipment (8-year life) 1,200,000 144,000
Purchase of non-depreciable goods 80,000 9,600

Directly traceable input VAT:

Input VAT traceable to exempt sales P 196,800
Amount applied for VAT refunds/TCC on export sales 150,000
Input VAT traceable to sales to the government 90,000

The following input VAT can only be traced to entire operations:

Amortization of deferred input VAT on capital goods P 7,400
Input VAT on supplies 28,100
Total non-traceable input VAT P 35,500

The creditable input VAT shall be computed in the VAT return as:
Input VAT
Input VAT carry-over, from prior period P 80,000
Deferred input VAT 75,000
Input VAT on purchase of goods or services 840,000
Input VAT on importation of equipment 144,000
Total available input tax P 1,139,000
Less: Deductions from input tax
Deferred input VAT for succeeding period1 P 211,600
Input VAT on exempt sales2 203,900
Input VAT on export sales applied for
refund or tax credit 150,000
Excess input VAT on sales to government3 23,350 588,850
 Total allowable (creditable) input VAT P 550,150

Notes to allowable input VAT computation:

1. Amortization schedule on input tax on capital goods with monthly aggregate acquisition
costs exceeding P1M:

Beginning Allowable Ending

Balance this month Balance
From previous period P 75,000 P 5,000 P 70,000
This period (60 months max.) 144,000 2,400 141,600
Total P 219,000 P 7,400 P 211,600

Note:
1. The deferred input VẤT from the prior period shall be amortized over the remaining 15
(i.e, 36-21) unamortized months. Hence, P75,000 + 15 = P5,000.
2. The P144,000 input VAT on the imported equipment must be amortized over 60 months.
Hence, P144,000 + 60= P2,400.

2. Input tax on exempt sales

Total input tax directly attributable to exempt sales P 196,800

Add: Ratable portion of input tax not directly attributable
(P2,000,000/10,000, 000 x P 35,500) 7,100
Total input tax attributable to exempt sales P 203,900

3. Excess input VAT on sales to the government

Input tax directly attributable to government sales P 90,000
Add: Ratable portion of input tax not directly attributable
(P1,000,000/1 0, 000,000 x P 35,500) 3,550
Total input tax attributable to sales to the government P 93,350
Less: Standard input VAT (P1M government sales x 7%) 70,000
Input tax on sales to government closed to expense P 23,350

Note: This excess amount can be negative or positive. The amount is simply included in
the computation whether positive or negative.

Composition of Creditable Input VAT

1. Input VAT traceable to regular sales
2. Input VAT traceable to export sales that are not applied for tax refund or tax credit
3. 7% of sales to government agencies or GOCCs

CHAPTER 9 – SELF-TEST EXERCISES

Discussion Questions
1. What is input tax?
2. What are the requisites of a creditable input VAT? Discuss each of them.
3. Enumerate the types of Input VAT.
4. How is the transitional input VAT computed? Explain.
5. Discuss the rules on timing of credit of regular input VAT.
6. Explain the concept of monthly aggregate acquisition cost.
7. Explain how to claim input VAT on a construction in progress.
8. What is the amount of presumptive input VAT?
9. Enumerate the entities entitled to a presumptive input VAT.
10. Who are subject to the standard input VAT?
11. Explain the concept of Input VAT carry-over.

True or False 1
1. Only VAT-registered taxpayers can claim input VAT.
2. There is no input VAT from purchases made from non-VAT-registered suppliers.
3. The total consideration paid by purchasers to VAT taxpayers includes the selling price and
the VAT.
4. Registrable persons can claim input VAT.
5. Those who cannot claim input VAT can deduct those input VAT as part of their costs or
expenses.
6. Input VAT can be claimed as a tax credit or a deduction at the option of the taxpayer.
7. The term creditable input VAT means input VAT deductible from output VAT.
8. Exempt persons who issue VAT invoices can claim input VAT.
9. Input VAT is computed as 12/112 of the selling price of the seller.
10. Input VAT may come from importation and domestic purchase.
11. The purchase of exempt goods and services has no input VAT.
12. If the VAT is not separately billed, it shall be computed as 12/112 of the selling price in the
sales document.
13. Input taxes on purchases for personal consumption are creditable against output VAT.
14. Only input VAT for purchase of goods or services in the course of business is creditable.
15. Input VAT needs to be evidenced by a VAT invoice or official receipt to be creditable.

True or False 2
1. The transitional input VAT is 2% of the vatable beginning inventory.
2. The input VAT on importation is creditable upon release of the goods from the Customs
custody.
3. The input VAT on domestic purchase of goods is deductible upon payment.
4. The input VAT on purchases of services is claimable in the month the services are rendered
not when paid.
5. Persons transitioning to the VAT system shall submit an inventory of goods.
6. The input VAT on the purchase of real properties may be paid in installment.
7. The input VAT on depreciable capital goods or properties must be amortized over a period of
60 months.
8. The input VAT on depreciable capital goods or properties with aggregate acquisition costs
exceeding P1M must be amortized over a period of 60 months.
9. The input VAT on non-depreciable vehicles is disallowed as tax credit.
10. The presumptive input VAT is 4% of the agricultural and marine purchases.
11. Traders of sardines, mackerel, milk, and cooking oil can claim presumptive input VAT.
12. The standard input VAT is 5% of sales to the government.
13. The standard input VAT is 7% of the purchases sold to the government.
14. There is a deductible expense when the actual input VAT exceeds the standard input VAT on
government sales.
15. There is a reduction in costs or expenses or an item of gross income when the standard input
VAT exceeds the actual input VAT on government sales.
16. The excess of the input VAT over the output VAT is referred to as input VAT carry-over.
17. Input VAT carry-over is included as part of the creditable input VAT of the following month.
18. The input VAT carry-over in a quarter is deductible in the following quarter.
19. The input VAT carry-over cannot be credited overa period of 3 years.
20. The Input VAT carry-over in a prior quarter can be carried over as input VAT in the first
month of the following quarter.
21. The Input VAT carry-over in the second month of a quarter is creditable on the third month
of that quarter.

Multiple Choice - Theory: Part 1

1. Which is creditable?
a. Input VAT incurred on personal purchases
b. Input VAT evidenced by an ordinary receipt
c. Input VAT on exempt sales
d. Input VAT traceable to vatable sales
2. Which is a likely source of a creditable input VAT?
a. Purchase of goods from persons not-engaged in business
b. Purchase of goods from non-VAT registered persons engaged in business
c. Purchase of goods from aliens who are not engaged in business abroad
d. None of these
3. Partial credit for input VAT is allowed on
a. Government sales
b. Regular sales
c. Export sales
d. Exempt sales
4. Full input VAT credit is allowed on
a. Regular sales
b. Export sales
c. Exempt sales
d. A and B
5. No input VAT credit is allowed on
a. Export sales
b. Government sales
c. Exempt sales
d. All of these
6. Which of the following input VAT can be claimed as tax refund?
a. Input VAT traceable to exempt sales
b. Input VAT traceable to regular sales
c. Input VAT traceable to sales to the government
d. Input VAT traceable to export sales
7. The input VAT on purchases of non-VAT-registered taxpayers shall be claimable as
a. Tax credit within two years
b. Deduction against gross income for income tax purposes
c. Deduction against output VAT
d. Any of these at the option of the taxpayer
8. Who can claim the VAT on importation as a tax credit?
a. An importer of goods for personal consumption
b. An importer of goods who is exempt from the VAT on importation
c. An importer of goods for business use
d. Any of these
9. The transitional input VAT is whichever is the
a. lower of 2% of beginning vatable inventory or the actual input VAT thereon.
b. higher of 2% of beginning vatable inventory or the actual input VAT thereon.
c. lower of 2% of total beginning inventory or theactual input VAT thereon.
d. higher of 2% of total beginning inventory or the actual input VAT thereon.
10. Which is included in the basis of the transitional input VAT?
a. Vatable goods and properties purchased from VAT suppliers
b. Vatable goods and properties purchased from non-VAT-suppliers
c. Vatable goods only purchased from VAT or non-VAT suppliers
d. A and B
11. Which is included in the VAT basis of the 2% transitional input VAT?
a. inventory of processed foods
b. inventory of fruits and vegetables
c. inventory of non-food goods
d. A and C
12. Which of the following properties may be included in the basis of the 2% transitional input
VAT?
a. Building subject to periodic provision for depreciation
b. Land and other properties not subject to depreciation
c. Land or building classified as inventory held for sale
d. Land or building classified as property held for use
13. Which of the following input VAT may be amortized?it to doisl
a. Input VAT on the sale of services
b. Input VAT on the purchase of goods on installment
c. Input VAT on the purchase of non-depreciable property
d. Input VAT on the purchase of depreciable property
14. The amortization of input VAT on certain properties is allowed when the aggregate
acquisition costs
a. exceeds P1M.
b. do not exceed P1 M.
c. exceeds P1,919,500.
d. exceeds P10M.
15. The input VAT on purchases of real properties may be claimed in installment if
a. the VAT seller is subject to VAT on the installment payments.
b. the sale of the real property is qualified as a deferred payment sale.
c. the seller is a realty dealer.
 d. the seller is a non-realty dealer.

Multiple Choice - Theory: Part 2

1. The amortization period for depreciable capital goods or properties shall be
a. whichever is longer between the actual useful life in months or 60 months.
b. whichever is shorter between the actual useful life in months or 60 months.
c. 60 months if the useful life of the capital goods or properties does not exceed 5 years.
d. 60 months, without egard to the actual useful life in months.
2. Statement 1: The input VAT on non-depreciable vehicles shall be claimed in the month
purchased.
Statement 2: The input VAT on construction in progress shall be claimed in the month billing
is paid.

Which is correct?
a. Statement 1
b. Statement 2
c. Both statements
d. Neither statement
3. The withheld final VAT is
a. 7% of the sales made to government.
b. 5% of the sales made to government.
c. 7% of the input VAT traceable to the government.
d. 5% of the purchases on sales made to the government.
4. Which of the following cannot claim presumptive input VAT?
a. Processor of sardines
b. Manufacturer of grease oil
c. Manufacturer of packed noodle based instant meals
d. Processor of milkdak:
5. The presumptive input VAT is
a. 2% of primary agricultural input.
b. 2% of primary marine input.
c. 4% of primary agricultural or marine input.h
d. 4% of primary agricultural input.
6. The standard input VAT is equivalent to
a. 7% of the sales made to government.
b. 5% of the sales made to government.
c. 7% of the input VAT traceable to the government.
d. 5% of the purchases on sales made to the government.
7. The withheld final percentage tax is
a. 7% of the sales made to government.
b. 3% of the sales made to government.
c. 5% of the sales made to the government.
d. 3% of the purchases on sales made to the government.
8. If the standard input VAT exceeds the actual input VAT traceable to government sales, the
excess is
a. an item of gross income subject to income tax.
 b. An item of deduction against gross income in inconme tax.
c. claimable as a tax eredit against other national taxes,
d. ignored since it has no further use,
9. Satement 1: VAT-registered persons do not pay VAT on zero-rated sales.
Sratement 2: VAT-registered persons always pay VAT on government sales.

Which statement is correct?

a. Statement 1
b. Statement 2
c. Both statement
d. Neither statement
10. Statement 1: The excess of the output VAT over creditable input VAT is paid to the
government.
11. Statement 2: The excess of creditable input VAT Over output VAT is claimed as a tax credit
or tax refund.

Which statement is încorrect?

a. Statement 1
b. Statement 2
c. Both statement
d. Neither statement
12. The excess of creditable input VAT over output VAT is
a. VAT payable
b. VAT refundable
c. Input VAT carry-over
d. Standard input VAT
13. Which of the following Input VAT carry-over is creditable against output VAT of the
quarterly VAT return?
a. Those arising from the first month of the quarter
b. Those arising from the second month of the quarter
c. Those arising from the prior quarter
d. All of these
14. Which of the following is creditable against the input VAT of the quarterly VAT return?
a. Input VAT from the first month of the quarter
b. Input VAT from the second month of the quarter
c. Input VAT from the third month of the quartera
d. All of these

Multiple Choice -Problem: Part 1

1. Andrew, a VAT-taxpayer, imported a golden necklace as a gift to his girlfriend. The foreign
seller billed a total price of P200,000. Andrew further paid P40,000 in other landed costs
excluding VAT. Andrew can claim an input VAT of
a. P0
b. P25,714
c. P28,800
d. P24,000
2. A VAT-taxpayer purchased services from a non-VAT-registered person in which he paid a
total of P56,000 on the purchase. The claimable input VAT shall be
a. P0
b. P6,000
c. P6,720
d. P7,200
3. A VAT-taxpayer imported vatable goods from a non-resident person who is not engaged in
trade or business. The goods which were intended to be re-sold in the Philippines had a
landed cost of P150,000. What is the claimable input VAT?
a. P0
b. P16,071
c. P18,000
d. P19,758
4. A non-VAT registered person purchased goods invoiced at P112 000 from a VAT-registered
person. The claimable input VAT shall be
a. P0
b. P12,000
c. P13,440
d. P15,000
5. A VAT taxpayer incurred the following during the month:

Consultancy fees P 700,000

Salaries expense 400,000
Supplies expense 300,000

Purchases from VAT suppliers were P250,000 supplies and P400,000 equipment. The
equipment is expected to last for 5 years.

What is the creditable input VAT during the month?

a. P 84,000
b. P114,000
c. P114,800
d. P 162,000
6. 6. A VAT-registered purchaser received the following billing from a VAT- registered seller:

Selling price P 200,000

Output VAT 20,000
Invoice price P 220,000

What is the creditable input VAT?

a. P0
b. P 20,000
c. P23,571
d. P24,000
7. A VAT taxpayer made the following purchases during the year:
 Purchases of goods, exclusive of VAT P 50,000
Purchases of goods, inclusive of VAT 44,800
Purchase of services, exempt from VAT 10,000
Purchase of services, inclusive of VAT 23,520
Total P 128,320

What is the input VAT?

a. P0
b. P 12,677
c. P13,320
d. P14,198
8. Mr. Alarcon is a percentage taxpayer. He bought goods billed at an invoiceprice of P20,160
from a VAT-registered taxpayer. Mr. Alarcon sold the goods in the same month at a price of
P42,000. How much input VAT is claimable by Mr. Alarcon?
a. P0
b. P 160
c. P2,160
d. P2,419
9. A taxpayer who became subject to VAT on the third quarter of 2020 had the following input
VAT:
August 2020 P 32,000
September 2020 40,000
October 2020 18,000

What is the claimable input VAT for the third quarter of 2020?
a. P32,000
b. P40,000
c. P72,000
d. P90,000
10. Mr. Donetsk, a VAT-taxpayer, purchased the following from a VAT-taxpayer:

VAT-exenmpt goods P20,000

Vatable goods 40,000
Total invoice price P60,000

Compute the input VAT allowable to Mr. Donetsk.

a. P0
b. P2,143
c. P4,286
e. P4,800
11. Ms. Kibungan, a VAT-taxpayer, made the following purchases (net of VAT) of vatable
goods during the month:

Purchase from non-VAT taxpayers P 50,000

Purchases from VAT taxpayers 250,000
Total P 300,000
12. What is the input VAT?
a. P0
b. P6,000
c. P30,000
d. P36,000
12. A VAT-taxpayer received and paid the following billings for vatable goods purchased:

Purchase from non-VAT taxpayers P 50,000

Purchases from VAT taxpayers 250,000
Total P 300,000
What is the claimable input VAT?
e. P0
f. P5,357
g. P 26,786
h. P 32,143
13. A VAT taxpayer had the following transactions during a first calendar quarter of 2020:
a. Purchases ofgoods in January but were paid in February - P 50,000
b. Purchase of services rendered in January but was paid in February – P80,000
c. Importation of goods which arrived in the last week of February but was released
upon payment of VAT on March - P250 ,000

Assume all accounts are exclusive of VAT.

What is the creditable input VAT in the January 2020?

a. P0
b. P6,000
c. P9,600
d. P15,600
14. What is the creditable input VAT in February 2020?
a. P9,600
b. P15,600
c. P39,600
d. P 45,600
15. What is the creditable input VAT for the 1st quarter of 2020?
a. P6,000
b. P15,600
c. P 39,600
d. P 45,600
16. Mr. and Mrs. Sikorsky compiled the following input VAT during a month.
Mr. Sikorsky Mrs. Sikorsky
Input VAT on purchase of goods P 10,000 P 12,000
Input VAT on purchases of services 12,000 8,000

Mr. Sikorsky is a non-VAT taxpayer while Mrs. Sikorsky is a VAT taxpayer.

What is the respective creditable input VAT of Mr. and Mrs. Sikorsky?
 a. P0; P0
b. P22,000; P 0
c. P0; P20,000
d. P 22,000; P20,000
17. A VAT taxpayer had the following input VAT during the year:

Input VAT on exempt sales P 204,000

Input VAT on regular sales 174,000
Input VAT on export sales 150,000
Total Input VAT P 528,000

What is the total creditable input VAT?

a. P0
b. P324,000
c. P378,000
d. P528,000

Mutliple Choice – Problems :Part 2

1. Dino Rado, opted to be registered as a VAT taxpayer effective the third quarter of 2020. He
had the following analysis of beginning inventory for the month of July 2020:

Purchases from non-VAT suppliers P 210,000

Purchases from VAT suppliers, inclusive of VAT 22,400
Total P 232,400

What is the transitional input VAT?

a. P 2,400
b. P4,600
c. P 4,648
d. P 24,900
2. A taxpayer who is transitioning to the VAT system had the following inventories upon
exceeding the VAT threshold:

Inventory of unprocessed
agricultural food products P 30,000
Inventory of processed goods 170,000
Inventory of non-food goods 210,000
Total P 410,000

The taxpayer acquired all the goods from non-VAT suppliers.

What is the transitional input VAT?

a. P0
b. P3,400
c. P 7,600
 d. P 8,200
3. Miss Beauty Fooled became subject to VAT effective the month of September. She had the
following beginning inventory in September:

Purchases from non-VAT suppliers P 30,000

Purchases from VAT suppliers, exclusive of VAT 220,000
Total P 250,000

What is the transitional input VAT?

a. P0
b. P 5,000
c. P 26,400
d. 30,000
4. The vatable sales of an agricultural supplier exceeded the VAT threshold. Prior to his VAT-
registration, an inventory of his goods was prepared below:

Fertilizers P400,000
Seeds 300,000
Farm equipment 98,000
Pesticides 18,000
Total P816,000
Assuming all amounts are inclusive of VAT when applicable what is the transitional input
VAT?
a. P1,928.57
b. P 12,429
c. P13,920
d. P16,320
5. A realty development company is commencing business. Because of the large scale of its
projected operations, it decided to register as a VAT taxpayer. It had the following
inventories of properties before commencement of operations:

Raw land contributed by shareholders P 11,200,000

Corporate office building 20,000,000
Various equipment 4,000,000

Compute the transitional input VAT?

a. P0
b. P224,000
c. P624,000
d. P1,200,000
6. A VAT registered taxpayer purchased equipment which is expected to last 10 years in
January 2020. The purchase price was P1,000,000, exclusive of P120,000 VAT.

What is the input VAT claimable respectively in January 2020 and February 2020?
a. P1,000; P1,000
b. P2,000; P2,000
 c. P120,000; P0
d. P0; P120,000
7. In January 2020, a VAT taxpayer made the following purchases:
8. Goods, exclusive of VAT
9. antollol s p
10. 800,000
11. 700.000
12. ollo P1.500.000
13. Capital goods, exclusive of VAT
14. Total
15. The capital goods pertain to several equipment with estimated useful life of
16. 3 years.
17. What is the claimable input VAT?
18. a. P180,000
19. b. P160,714
20. c. P98,333
21. agg d. P97,400
22. 8
23. Popogirin Corporation purchased a commercial lot with
24. in April 2020. The lot and the building were separately priced by
25. an old ware
26. as follows:
27. Lot
28. Building (estimated useful life of 7 years)
29. Total
30. P 1,000,000-
31. 600.000
32. P 1600,000
33. 322
34.