All ▸ Bar 2024 ▸ COMMERCIAL AND TAXATION LAWS ▸ XIII. TAXATION LAW (R.A. No. 8424, as amended by R.A. No. 10963, R.A. No. 11534) ▸ J. Value-Added Tax (VAT) (R.A. No. 8424, as amended, R.R. No. 16-2005, as amended) ▸ 4. Transactions Deemed Sale Subject to VAT

Question

Subject: Value-Added Tax (VAT)

Scenario 1:

ABC Corporation is engaged in the business of selling electronic gadgets. On July 1, 2021, ABC sold 100 units of smartphones to XYZ Retail Store for Php 2,000 each. ABC issued an official receipt indicating that the transaction is subject to VAT. XYZ Retail Store, being a VAT-registered entity, agreed to the terms and paid the total amount due.

Discuss whether the sale of smartphones by ABC Corporation to XYZ Retail Store is considered a transaction subject to VAT. Support your answer with the applicable law.

Scenario 2:

On March 20, 2022, Juanita, a private individual, sold her luxury car to her friend, Pedro. The selling price was Php 3,500,000. Juanita is not VAT-registered. However, she indicated in the Deed of Sale that VAT should be paid by Pedro. Pedro, who is a VAT-registered individual, agreed to the terms and paid the total amount due.

Discuss whether the sale of the luxury car by Juanita to Pedro is considered a transaction subject to VAT. Support your answer with the applicable law.

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