AIRFREIGHT 2100, INC

Tax Compliance Review on Compensation

Fiscal Year 2020

PRESENT CONDITIONS

1. MEDICAL CASH ALLOWANCE (DEPENDENTS OF EMPLOYEE)

Due to failure to fund PHILCARE, the Company reimbursed medical expenses incurred
by the employee and its dependent. Expenses incurred is subject to endorsement and
audit of the Clinic Dept. and Payable Dept.

Receipts issued is under the name of employee or its dependent

Company does'nt decl

 EXPOSURE/ SAVINGS
Deficiency witholding tax or
disallowance of portion of
salaries and wages for
income tax purposes
ANALYSIS
Under RR No. 11-18 Medical
cash allowance to dependents
of employees, not exceeding
P1,500 per employee per
semester or P250 per month.
Actual medical assistance, e.g.
medical allowance to cover
medical and healthcare needs,
annual medical/executive
check-up, maternity assistance,
and routine consultations, not
exceeding P10,000.00 per annum
De minimis benefits in excess of
the threshold can still be exempt
as “other benefits,” together with
the employees’ 13th month pay,
but not to exceed P90,000
 RECOMMENDATION MANAGEMENT RESPONSE

The Company must set a fund

to pay for the premium of
health cards of their employee

Pros:
1. Maximize the benefits that
can be received by our employee
and their dependent
2. Minimize personal cash
advances due to sickness
3. May claim input taxes to reduce
output taxes