BM1903
INTRODUCTION TO BUSINESS TAXATION
I. TRUE or FALSE. Read and analyze each item. Shade if the statement is TRUE or if FALSE. Fill in
the entire circle darkly and completely in the answer sheet. (25 items x 2 points)
1. A subsistence livelihood activity is a business.
2. A single income activity rendered by a resident person is engaged in a business.
3. A non-stock and non-profit educational institution is engaged in a business.
4. A sale of company cars to its employee officers is considered a business transaction.
5. Regular sale of human blood to obtain a gain is considered a business.
6. A Filipino citizen who rendered regular services for a profit to an employer is considered engaged in a
business.
7. All non-business transactions are not subject to business tax.
8. Casual sales are not subject to business tax but subject to income tax.
9. Only VAT-registered business is subject to VAT.
10. Only one (1) TIN is to be assigned for every business by a sole proprietor taxpayer.
11. A business should register before the start of its operation.
12. A business should renew its registration annually before the end of the year.
13. Excise taxes are imposed on the production, sale, or consumption of a commodity in a country.
14. General consumption taxes are levied on retail sales price of the products.
15. A non-VAT business is generally subject to other percentage tax.
16. A VAT business is liable to pay VAT unless the BIR maintains its VAT registration.
17. Non-compliance to business registration would consider the business illegal.
18. Once an annual registration fee for the main office is paid, there is no need to pay separately for the
annual registration fee of its branch, warehouse, or facility.
19. Cooperatives are business tax exempt, but subject to registration fee.
20. In general, whether the business is to be registered as VAT or non-VAT, its registration fee is P500.
21. The taxpayer is required to pay annual registration fee of P500 for each distinct and separate business.
22. When the business received cash collection of charged invoice, it should issue a commercial invoice
for the amount received.
23. A non-VAT person can only shift to VAT after three (3) years upon registration as non-VAT.
24. Sellers of merchandise on a commission basis under the direct selling method of marketing do not
constitute a branch.
25. Excise tax regulates the excessive consumption of sin products.
II. MULTIPLE CHOICE. Read and analyze each item. Fill in completely the entire circle that contains the best
answer in the answer sheet. (15 items x 2 points)
1. It refers to an activity regularly engaged in as a means of livelihood or with a viewpoint of obtaining
profit.
a. Business b. Trade c. Commerce d. All of these
2. Which of the following is NOT considered a business activity?
a. Selling of goods c. Employment
b. Production of goods for a consideration d. Rendering services for a fee
3. Which of the following transactions is NOT considered a business activity in the Philippines?
a. One-time service rendered by a nonresident Filipino citizen for a fee
b. One-time service rendered by a nonresident alien for a fee
c. One-time sale of defective goods to the employees with a substantial discount
d. One-time sale of company car to its officers
4. The business registration should be made:
a. After the business commences its operation.
b. Before the start of the business.
07 Task Performance 1 *Property of STI
Page 1 of 3
BM1903
c. Before the end of January.
d. Before the start of business registration subject to renewal annually before the end of January.
5. Which of the following statements is NOT correct?
a. The payment of VAT is monthly.
b. A VAT-registered taxpayer can pass on the VAT even to non-VAT registered buyers.
c. Any business or businesses pursued by an individual where the aggregate gross sales or receipts
do not exceed P100,000 during any 12-month period shall be considered principally for subsistence
or livelihood and not in the course of trade or business.
d. Non-stock, nonprofit private organizations are subject to VAT if their income from sales is used for
non-profit purposes.
6. Who among the following is NOT exempt from the payment of P500 registration fee?
a. Overseas worker c. Subsistence livelihood earner
b. Compensation earner d. Self-employed
7. A tax imposed on the production, sale, or consumption of a commodity in a country is called:
a. Excise tax b. Income tax c. Value-added tax d. Other percentage tax
8. Which of the following is NOT a business principally for livelihood?
a. Carinderias b. Sari-sari store c. Operator of 5 tricycles d. Agricultural farm
9. A business is earning less than a quarterly income of P250,000. How much is the tax due?
a. P30,000 b. P7,500 c. P 0 d. Exempt
10. A sidewalk vendor opted to register as non-VAT business to the BIR. The business registration fee
would be:
a. Exempt b. P 50 c. P 500 d. P 1,500
11. Mac is the owner of Super Mac Center and Beauty Mac Cosmetics, which are housed in the same
building. How much should be his total business registration fee?
a. P 500 b. P 1,000 c. P 1,500 d. P 2,000
12. Sashimi Yu, a Japanese nonresident foreign corporation, obtained a P100,000,000 contract from the
Philippine Government to repair the La Mesa Dam. The registration fee to be paid to the BIR by Sashimi
Yu would be:
a. None b. P 500 c. P 1,000 d. P 5,000
13. A multi-purpose cooperative is registered with the Securities and Exchange Commission (SEC) and the
Cooperative Development Authority (CDA). It has a main office, a sales office, and a warehouse. For
the year, it has P5,000,000 total collection from its members. The annual registration fee of the
cooperative would be:
a. Exempt b. P 500 c. P 1,500 d. P 5,000
14. Mac Trading, a non-VAT business, sold the P200,000 products to Mark Enterprises. If Mac’s purchases
during the taxable period amount to P224,000, inclusive of VAT, and the cost of sales is P89,600, how
much is the amount of business tax payable?
a. P 24,000 b. P 14,400 c. P 9,600 d. P 6,000
15. A trading business is registered as non-VAT. If its sales for the year is P2,000,000, how much would
be its business tax payable, if it has P50,000 input VAT on its purchases?
a. P 240,000 b. P 190,000 c. P 120,000 d. P 60,000
07 Task Performance 1 *Property of STI
Page 2 of 3
BM1903
-----------------------------------------------------------------ANSWER SHEET-------------------------------------------------------------------------
NAME: DATE: SCORE: ____________
I. TRUE or FALSE II. MULTIPLE CHOICE
1 11 21 1 11
2 12 22 2 12
3 13 23 3 13
4 14 24 4 14
5 15 25 5 15
6 16 6
7 17 7
8 18 8
9 19 9
10 20 10
07 Task Performance 1 *Property of STI
Page 3 of 3
