Practice question
A VAT-registered seller transfers taxable inventory to a creditor to settle a debt. It receives no cash. What is the correct statutory characterization?
- No disposition because cash is absent
- A dividend to the creditor regardless of its status
- A transfer to a creditor in payment of debt expressly deemed a sale
- An automatically exempt gift
- Only a consignment regardless of the facts
Legal references
- NIRC Section 106(B): https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html
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