Chapter 12 - Input Vat2013

BUSINESS AND TRANSFER TAXATION 6th Edition (BY: VALENCIA & ROXAS) 89SUGGESTED ANSWERS

Chapter 12: Input VAT Credits and Refunds

CHAPTER 12

INPUT VAT CREDITS AND REFUNDS

Problem 12–11. True 2. False – should not be subjected to the same tax. 3. False – VAT refund. 4. False – excess of input VAT over output VAT. 5. False – VAT sales invoice or VAT official receipt. 6. True 7. True – for as long as the buyer is VAT-registered. 8. False – importation is subject to VAT whether for business or personal use. 9. True 10. True 11. False – goods for sale is not covered by the P1,000,000 threshold. The goods

must depreciated/amortized as a result of use in business. 12. False – only zero-rated/ effectively zero-rated sales and cancellation of VAT registration

can apply for TCC issuance. 13. True 14. False – the resident lessee or licensee must file the VAT return in the name of

nonresident foreign entity. 15. True

Problem 12–21. True 2. False – not creditable. 3. True 4. False – TIV is granted only once when a non-VAT taxpayer shifts to VAT. 5. False – PIV is intended only the primary raw materials used in the processing of

sardines, mackerel, milk, refined sugar, cooking oil, packed noodles based instant meals.

6. True 7. True 8. True 9. False – within 2 years. 10. True 11. True 12. True 13. True 14. False – input VAT related to zero-rated or effectively zero-rated sales and input VAT of

VAT-registered person cancelling to non-VAT. 15. True

Problem 12–31. B 2. C 3. D 4. C 5. D 6. B – sugar only 7. D 8. A 9. C 10. A



Problem 12 – 4 AZero. The business is non-VAT; hence, no input VAT is allowed.

Problem 12 – 5 AOutput VAT (P425,600/9.3333) P45,600Less: Input VAT (P448,000/9.3333) 48,000Input VAT carry-over P 2,400

VAT-registered buyers of non-VAT business that collects VAT is allowed to deduct input VAT.

Problem 12 – 6 DInput VAT from:

VAT invoice in the name of Capoy Enterprises (P224,000/9.333) P 24,000NonVAT invoice with VAT charges (P168,000/9.333) 18,000

Total creditable input VAT P42,000

The VAT invoice in the name of Capuypoy Trading is not allowed because it does not bear the name of Capoy Enterprises.

Problem 12 – 7 BInput VAT from VAT purchased invoice (P1,792,000/9.333) P192,000Non-VAT purchase invoice (P313,600/9.333) 33,600Transitional input VAT 5,800Total input VAT from purchases P231,400Less: Proportionate input VAT for sales to the government

(P192,000 + P33,600) x 500/2,000 56,400Input VAT balance P175,000Add: Standard input VAT on sales to government (P560,000/9.333) x 7% 35,000Total creditable input VAT P210,000

Problem 12 – 8 APurchases per VAT invoice amount (P140,000/9.3333) P 15,000Payments for VAT person’s services inclusive of VAT (P1,232/9.3333) 132Payment for services of VAT person, net of VAT (P917 x 12%) 110Total available input VAT P 15,242

Problem 12 – 9 CInput VAT from:

Machine 1 – inventory (P1,680,000/9.333) P180,000Amortization of input VAT from:

Machines 2 and 3 [(P672,000 + P560,000)/9.333]/60 months 2,200Creditable input VAT – January P182,200

Note: Machines 2 and 3 are depreciable capital goods with aggregate costs of P1,100,000excluding VAT; hence, their input VAT is subject to amortization of 60 months or estimated useful life, whichever is shorter.

Problem 12 – 10 DJanuary February March

Output VAT P120,000 P156,000 P180,000Input VAT from purchases of:

Goods (72,000) (84,000) (96,000)Capital goods – March acquisition (60,000)Capital goods – February acquisition . ( 3,000) ( 3,000)

Net VAT payable (refundable) P 48,000 P 69,000 P21,000



Problem 12 – 111. Letter B

Total costs incurred to dateYear 1 P4,000,000Year 2 8,000,000 P12,000,000

Multiplied by percent of construction costs subject to VAT 60%Construction costs subject to VAT P 7,200,000Multiplied by VAT rate 12%Creditable input VAT in year 2 P 864,000

2. Letter C Output VAT P3,600,000Less: Input VAT from purchases P1,200,000

Input VAT from construction in progressYear 3 (P3,000,000 x 60% x 12%) 216,000 1,416,000

Net VAT payable P2,184,000

Problem 12 – 12 AOutput VAT P6,000,000Less: Input VAT from purchases P2,000,000

Input VAT from CIP:Materials (P3,600,000 x 30%) 1,080,000Labor (P2,400,000 x 20%) 480,000Overhead (P1,200,000 x 20%) 240,000 3,800,000

Net VAT payable P2,200,000

Problem 12 – 131. Letter D

Purchases from VAT person (P644,000/9.333) P69,000Purchases from Non-VAT person in VAT invoice (P61,600/9.333) 6,600Payments to VAT services (P56,000/9.333) 6,000Total creditable input VAT P81,600

2. Letter AOutput VAT (P784,000/9.333) P 84,000Less: Creditable input VAT 81,600Net VAT payable (refundable) P 2,400

Problem 12 – 14 BEquipment (P2,500,000 x 12%) = P300,000/60 P 5,000Supplies (P10,000 x 12%) = P1,200 1,200Goods (P800,000 x 12%) = P96,000 96,000Creditable input VAT P102,200

Problem 12 – 15 CSiopao machine (P300,000 x 1) P300,000Siomai machines (P250,000 x 2) 500,000Pizza machines (P200,000 x 3) 600,000Oven (P150,000 x 4) 600,000Total amount P2,000,000Add: Custom duty (P2,000,000 x 10%) P200,000

Excise tax (P2,000,000 x 5%) 100,000Storage fee (P2,000,000 x 2%) 40,000 340,000

Total landed costs P2,340,000Multiplied by VAT rate 12%Input VAT P 280,800



Problem 12 – 161. Letter A

Total machines – imported (P100,000 + P200,000 + P300,000) P 600,000Add: Excise tax (P600,000 x 50%) 300,000Total P 900,000Multiplied by VAT rate 12%VAT paid on importation P 108,000

2. Letter DOutput VAT (P1,000,000 x 12%) P 120,000Less: Creditable input VAT:

Machine 2 (P200,000 + P100,000) x 12% P36,000Machine 3 (P300,000 + P150,000) x 12% 54,000 90,000

VAT payable P 30,000

Problem 12 – 17 DActual input VAT (P896,000 x 20%)/9.333, higher P19,200Transitional input VAT (P1,500,000 x 50%) x 2% 15,000Total transitional input VAT allowed, the higher amount P34,200

Problem 12 – 18 AOutput VAT (P1,600,000 + P2,000,000) x 12% P432,000Less: Other percentage tax paid 48,000Output VAT balance P384,000Less: Input VAT from purchases – August to December P240,000

Transitional input VAT, (P100,000 x 2%) = P2,000; higher - actual 34,000 274,000Net VAT payable P110,000

Problem 12 – 19 BPrime raw materials – coconut for cooking oil (P1,000,000 x 3/5) P600,000Multiplied by presumptive VAT rate 2%Presumptive input VAT P 12,000

Problem 12 – 20 COutput VAT (P2,800,000/9.333) P300,000Less: Input VAT from

Presumptive input VAT – sardines (P800,000 x 4%) P32,000Supplies (P50,400/9.333) 5,400Amortization of capital goods [(P1,232,000/9.333)/60] x 3 months 6,600 44,000

Net VAT payable P256,000

Problem 12 –21 BOutput VAT (P600,000 + P1,500,000) x 12% P252,000Less: OPT (P600,000 x 3%) 18,000Output VAT balance P234,000Less: Transitional input VAT (P100,000 x 2%) P 2,000

Presumptive input VAT (P800,000 – P200,000) x 4% 24,000 26,000Net VAT payable P208,000

Note: The basis of presumptive input VAT is the gross value of the purchased raw materials used in the production.

Problem 12 –22 CInput VAT from purchases – second quarter (P5,040,000/9.333) P540,000Input VAT carry-over from first quarter 57,000



Input VAT - Purchases returns (P50,000 x 12%)Input VAT amortized on capital goods (P180,000/60) x 3Creditable input VAT – second quarter

Problem 12 –23 DTexas Instruments, Inc. (ECOZONE) P10M 10%San Miguel Corporation 15M 15%Department of Tourism 25M 25%Low cost housing (P1,000,000 per house and lot) 50M 50%

P100M 100%Input VAT on purchasesLess: Input VAT allowed:

Zero-VAT sales – Texas Instruments (P3.6M x 10%) P 360,000Reg. VAT sales – San Miguel Corporation (P3.6M x 15%) 540,000Std input VAT – Department of Tourism (P25,000,000 x 7%) 1,750,000

Input VAT not allowed

Problem 12 –24 BAmount of input VAT allowed for VAT refund or

Issuance of TCC (P600,000 x 20/50) – export sales or zero-rated VAT related

Problem 12 –25 DInput VAT from importation (P1,120,000/9.333)Input VAT per VAT invoice issued

by nonVAT person (P896,000/9.333)Total input VAT refund

Problem 7 – 26 AOutput VAT on actual sales [P400,000 + (P560,000/1.12)] x 12%Add: Output VAT on deemed sales (P30,000 + P20,000) x 12%Total output VATLess: Other percentage tax paid (P400,000 x 3%)Output VAT balanceLess: Input VAT from:

Purchases (P672,000/9.333) P72,000Input VAT previous quarter 42,000Transitional input VAT 2,000

Input VAT carry-over

Problem 12 – 27Contract priceLess: VAT withholding (P6,720,000/9.333) P 720,000

Final withholding income tax (P6,000,000 x 7.5%) 450,000Net remittance to Japan Inc.

Problem 12 – 28Importation for business useAdd: Customs duties (P1,000,000 x 50%)TotalAdd: Excise tax (P1,500,000 x 10%)TotalMultiplied by VAT rateCreditable Input VAT

( 6,000) 9,000

P600,000

P3,600,000

2,650,000 P 950,000

P240,000

P120,000

96,000P216,000

P108,0006,000

P114,00048,000

P 66,000

116,000

(P50,000)

P6,720,000

1,170,000P5,550,000

P1,000,000500,000

P1,500,000150,000

P1,650,00012

% P 198,000



Problem 12 – 291. Output VAT (P1,456,000/9.3333) P156,000

2. Input VAT (P1,120,000/9.3333) P120,000

3. Net VAT payable (P156,000 – P120,000) P 36,000

Problem 12 – 301. Net income (P1,200,000/30%) P4,000,000

Add: Operating expenses (P2,540,000- P240,000) 2,300,000Gross income P6,300,000Add: Cost of sales (P3,360,000/1.12) P3,000,000

Less: Increase in inventory 300,000 2,700,000Sales P9,000,000

2. Output VAT (P9,000,000 x 12%) P1,080,000Less: Input VAT from purchases (P3,360,000/9.333) P360,000

Input VAT from operating expenses 240,000Input VAT from CIP:

Materials (P560,000 + P448,000 + P672,000)/9.333 180,000Labor (P1,500,000 x 40%) x 12% 72,000Overhead (P1,500,000 x 20%) x 12% 36,000 888,000

Net VAT payable P 192,000

Problem 12 – 31Non-VAT

Total sales as of November 1, 201B P1,900,000Add: Sales on November to December 201B

(P672,000/1.12) + P100,000 = P700,000/70% 1,000,000Total sales P2,900,000Multiplied by VAT rate 12%Output VAT P 348,000Less: Other percentage tax paid 57,000Output VAT balance P 291,000

VAT-registeredOutput VAT P 348,000Less: Other percentage tax paid 57,000Output VAT balance P 291,000Less: Transitional input VAT

(P672,000/1.12) + (P100,000) = P700,000 x 2% = P14,000(P672,000/9.333) = P72,000, higher + (P100,000 x 2%) 74,000 217,000

VAT advantage to register under VAT system P 74,000

AlahNganin should register under VAT system.

Problem 12 – 32Output VAT (P5,000,000 x 12%) P600,000Less: Input VAT from:

Supplies (P784,000/9.333) P84,000Rent (P214,000/107%) x 12% 24,000Creditable input VAT

from previous period 112,000Presumptive input VAT

(P2,200,000 – P200,000) x 2% 40,000 260,000Net VAT payable P340,000



Problem 12 – 33Output VAT (P3,000,000 x 12%) P360,000Less: Transitional input VAT (P100,000 x 2%) P 2,000

Presumptive input VAT (P1,620,000 x 4%) 64,800Input VAT from operating expenses 3,600 70,400

Net VAT payable P289,600

The presumptive input VAT is based on primary raw materials used. The primary raw materials used during the period are computed as follows:

Copra raw materials, beginning P 100,000Add: Purchases of copra from farmers 1,900,000Total P2,000,000Less: Copra raw materials, ending 380,000Copra raw materials used P1,620,000

Problem 12 – 34Output VAT P200,000Less: Input VAT from:

Purchases P240,000Carry-over from last quarter 30,000Capital goods (P180,000/60) 3,000 273,000

Creditable input VAT for next quarter(P

73,000)

Problem 12 – 351. Input VAT from purchases for business (P112,000/9.333) P 12,000

Input VAT from importation (P79,520/9.333) 8,520Creditable input VAT for the period P20,520Less: Output VAT 20,000Input VAT carry-over P 520

2. Input VAT carry-over (P20,520 – P20,520) P - 0 -

Problem 12 – 36Input VAT on Depreciable Capital Goods from purchase of

Truck (P1,120,000/9.333) P120,000Processing machine (P1,568,000/9.333)/60 x 1 2,800

Total Input VAT for the last quarter P122,800

Note: The Input VAT from the purchase of truck should not be amortized because its cost doesnot exceed P1,000,000.

Problem 12 – 37Transitional input VAT P 40,000Presumptive input VAT 50,000Input VAT on purchases of depreciable capital goods (P180,000 x 10/15) 120,000Input VAT on operating expenses (P96,000 x 10/15) 64,000Input VAT not allowed for TCC issuance P274,000

Only input VAT that can be traced or allocated to zero-rated or effectively zero-rated is allowed for issuance of TCC. Transitional and presumptive input VATs are not allowed for TCC issuance.



Problem 12 – 38VAT invoice in the name of Busal Enterprises (P448,000/9.333) P 48,000NonVAT invoice charged with VAT (P313,600/9.333) 33,600Total input VAT P 81,600Multiplied by percent of VAT for regular sales (P1M/P1.5M) = 2/3 2/3Creditable input VAT from regular VAT sales P 54,400

The input VAT on sales to government is subject to SIV and is deductible only from the Output VAT on sales to the government. Its actual input VAT of P18,000 is not allowed to be deducted from output VAT. (R.A. 9337)

Problem 12 – 39Input VAT carry-over P 24,000Input VAT from purchases 60,000Input VAT capital goods 240,000Total P324,000Less: Adjustments:

Input VAT on purchase returns(P100,000 x 12%) P 12,000

Input VAT on VAT-exempt sales(P60,000 x 5/20) 15,000

Unamortized portion of input VATon capital goods(P240,000 – (P240,000/60) 236,000 263,000

Adjusted creditable input VAT P 61,000

Chapter 12 - Input Vat2013

Documents

Transcript of Chapter 12 - Input Vat2013