EXERCISE 18-1. TRUE OR FAISE QUESTIONS 395 18 1. Sale of services is subject to value-added tax whether it is performed within or outside the Philippines provided that the establishment that is engaged in rendering services is registered in the Philippines. 2. Admission fees on moviehouses which are subject to local amusement tax are still subject to value-added tax. 3. Taxis are subject to value-added tax on the carriage of goods and passengers. 4. Sale of electricity by companies which generate electricity by means of renewable sources of energy are subject to value-added tax but does not result to output tax 5. The tax base on sale of services which are subject to value-added tax shall be the cost of services rendered during the period regardless of whether such services have been paid or not 6. The tax base of value-added taxes imposed on restaurants does not include the local business taxes charged by the local government unit on gross receipts. 7. KTV bars, resto bars, music lounges and videoke bars are subject to 12% value- added tax because they are engaged in sale of services. 8. M/V Roro, a passenger ferry boat which travel the route Allen, Samar to Matnog Sorsogon (vice-versa) is subject to value-added tax on the transport of goods and cargo (including buses and trucks) but not on the carriage of passengers. 9. Transport of passengers and cargoes by domestic air or sea vessels from the Philippines to Hongkong are subject to value-added tax but such sales do not result to an output tax. 10. Franchise grantees are subject to value-added tax except electric utilities because they are subject to a franchise tax of 2%. 11. A franchisee to operate a Jollibee branch in Metro Manila is subject to a franchise tax. 12. Dormitories and boarding houses for students are subject to value-added tax if their aggregate annual gross receipts exceed P3,000,000 13. Lessors of apartment houses become subject to VAT the moment they charge a monthly rental of more than P15,000 regardless of their aggregate annual rental