Below is the data of selected accounts of a taxpayer, with VAT and non-VAT business. No inventories were done at the start and end of the taxable period.Purchases, all from VAT suppliers,Exclusive of VAT Php 750, 000Sales, exclusive of any tax: Exports, VAT business 850, 000Exports, non-VAT business 600, 000Domestic sales, VAT business 200, 000Domestics sales, non-VAT business 250, 000How much is VAT payable on domestic sales?Select one:a.Php 0b.Php 27, 000 c.Php 53, 000 d.Php 14, 400
Question
Below is the data of selected accounts of a taxpayer, with VAT and non-VAT business. No inventories were done at the start and end of the taxable period.Purchases, all from VAT suppliers,Exclusive of VAT Php 750, 000Sales, exclusive of any tax: Exports, VAT business 850, 000Exports, non-VAT business 600, 000Domestic sales, VAT business 200, 000Domestics sales, non-VAT business 250, 000How much is VAT payable on domestic sales?Select one:a.Php 0b.Php 27, 000 c.Php 53, 000 d.Php 14, 400
Solution
To compute for the VAT payable on domestic sales, we first need to identify which sales are subject to VAT. In this case, only the domestic sales from the VAT business are subject to VAT.
Here are the steps to compute for the VAT payable:
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Compute for the Output VAT: Domestic sales (VAT business) * 12% VAT rate 200,000 * 12% = Php 24,000
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Compute for the Input VAT: Purchases (from VAT suppliers) * 12% VAT rate 750,000 * 12% = Php 90,000
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Subtract the Input VAT from the Output VAT to get the VAT payable: Output VAT - Input VAT = VAT payable 24,000 - 90,000 = -Php 66,000
However, since the VAT payable resulted in a negative amount, it means that the taxpayer has an excess input VAT. This can be carried over to the next taxable period or applied for a tax credit/refund. Therefore, the VAT payable for the domestic sales for this taxable period is Php 0.
So, the answer is a. Php 0.
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