Practice question
A VAT-covered enterprise makes an incidental transaction connected with its regular economic activity. It says only its principal activity can ever fall in the course of business. Which is best?
- Incidental transactions are always excluded
- Only the largest transaction counts
- The enterprise may privately choose the legal definition
- The word incidental automatically means personal
- Section 105’s definition includes transactions incidental to the regular commercial or economic activity
Legal references
- https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html — NIRC, section 105
- https://lawphil.net/statutes/repacts/ra2024/ra_11976_2024.html — RA 11976 amendments to NIRC sections 106 and 108
- https://lawphil.net/statutes/repacts/ra2024/ra_12023_2024.html — RA 12023 amendments to sections 105 and 108 and new section 108-A
- https://bir-cdn.bir.gov.ph/BIR/pdf/RR%2014-2025.pdf — BIR RR 14-2025, digital-service VAT transition
Answer this question in flashcards to review your response and continue practicing.