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Question

Value-Added Tax (VAT) - Elements of VATable Transactions

Alejandro, a business owner engaged in the sale of electronic gadgets, recently discovered that his sales transactions may be subject to Value-Added Tax (VAT). He seeks your advice on whether his specific transactions are considered VATable or not.

Based on the provisions of R.A. No. 8424, as amended, and R.R. No. 16-2005, as amended, analyze the following scenarios and determine if they qualify as VATable transactions:

1. Alejandro sells brand new smartphones to individual buyers for personal use.
2. Alejandro purchases a laptop for his business operations.
3. Alejandro sold a laptop to a government agency covered by a Memorandum of Agreement (MOA).
4. Alejandro buys office supplies and equipment for his business operations.
5. Alejandro sells refurbished electronic gadgets to a registered business for resale purposes.

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Answer