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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

Value-Added Tax (VAT) - Transactions Deemed Sale Subject to VAT

Consider the following scenarios involving transactions that are deemed as sale subject to Value-Added Tax (VAT). Discuss the VAT implications for each scenario in accordance with the relevant provisions of Republic Act No. 8424, as amended, and Revenue Regulations No. 16-2005, as amended.

  1. Mr. Reyes, a freelance photographer, provided photography services for a wedding reception. The total amount of his professional fee is Php 20,000. As part of his services, he also provided a photo album to the couple. Are the photography services and the photo album subject to VAT? If yes, how much VAT should be charged?
  2. ABC Corporation, engaged in the business of manufacturing clothes, acquired new sewing machines worth Php 1,000,000. The machines were imported from a foreign country and were used in the production of clothes for sale. Is the acquisition of the sewing machines subject to VAT? If yes, how much VAT should be paid?
  3. XYZ Company, a real estate developer, sold a residential condominium unit to Ms. Cruz for Php 5,000,000. The company also included a parking slot as part of the package. Is the sale of the residential condominium unit subject to VAT? If yes, how much VAT should be collected? What about the parking slot?


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Bar Review Question: Value-Added Tax (VAT) - Transactions Deemed Sale Subject to VAT Consider the following scenarios i