VAT Multiple Choice Questions and Answers
This comprehensive guide includes over 25 multiple-choice questions (MCQs) on Value Added Tax (VAT). These questions cover everything from the basics of VAT to calculations, applications, and country-specific rules including the Philippines. If you’re studying tax systems or preparing for exams, this page is for you. For background reading, check our guides on Types of VAT and VAT Uses.
General VAT Knowledge
Q1: What does VAT stand for?
- A) Variable Accounting Tax
- B) Value Addition Tax
- C) Value Added Tax
- D) Vendor Adjustment Tax
Answer: C) Value Added Tax
Q2: VAT is a type of:
- A) Direct Tax
- B) Wealth Tax
- C) Indirect Tax
- D) Inheritance Tax
Answer: C) Indirect Tax
Q3: At which stage is VAT charged?
- A) Only on final sale
- B) At every stage of production and distribution
- C) Only during import
- D) Only by wholesalers
Answer: B) At every stage of production and distribution
VAT Calculation Problems
Q4: If a product costs $100 and VAT is 15%, what is the final price?
- A) $105
- B) $110
- C) $115
- D) $120
Answer: C) $115
Q5: A service is billed at ₦50,000 and VAT is 12%. What is the total amount paid?
- A) ₦55,000
- B) ₦56,000
- C) ₦57,500
- D) ₦60,000
Answer: B) ₦56,000
VAT in Business Practices
Q6: Who submits VAT to the government?
- A) Customer
- B) Retailer
- C) All VAT-registered businesses in the supply chain
- D) Wholesaler only
Answer: C) All VAT-registered businesses in the supply chain
Q7: What is required to claim input VAT?
- A) Receipt
- B) Tax Invoice
- C) Purchase Order
- D) Delivery Note
Answer: B) Tax Invoice
VAT in the Philippines
Q8: What is the standard VAT rate in the Philippines?
- A) 10%
- B) 12%
- C) 15%
- D) 18%
Answer: B) 12%
Q9: Who is responsible for collecting VAT in the Philippines?
- A) BIR (Bureau of Internal Revenue)
- B) SEC
- C) DTI
- D) BSP
Answer: A) BIR (Bureau of Internal Revenue)
Advanced VAT Questions
Q10: A product costs €400 with 20% VAT included. What is the VAT amount?
- A) €66.67
- B) €80.00
- C) €100.00
- D) €60.00
Answer: B) €80.00
Q11: What type of VAT is recovered by businesses on purchases?
- A) Output VAT
- B) Input VAT
- C) Export VAT
- D) Withholding VAT
Answer: B) Input VAT
Practice Resources
Want to try more exercises? Visit:
- Corporate Finance Institute: VAT Explained
- Math-Only-Math: VAT Problems
- BYJU’s: Class 8 VAT Solutions
Conclusion
VAT affects everyone—from shoppers to CEOs. This set of multiple choice questions is designed to test your VAT knowledge and boost your confidence. Want to learn more? Visit our comprehensive guides on Types of VAT and VAT Uses.