TAXATION MACMOD

Fringe Benefits Tax (FBT)

1. FB covers any goods, services or other benefits account of illness, marriage, birth of a baby, etc.,
given by an employer to a managerial or an
supervisory employee. Included are: j. Daily meal allowance for overtime work not
a. Housing benefits exceeding twenty five percent (25%) of the basic
b. Expense account minimum wage.
c. Vehicle of any kind
d. Household personnels (maids, drivers etc.) 6. General rules on the valuation of FB’s (monetary
e. Interest on loan of less than the normal market value) unless specifically covered by the special
rate rules in no.7
f. Membership fees in social and athletic clubs etc. a. If the FB is granted in money, the amount thereof.
g. Expenses for foreign travel b. If the FB is in property other than money and
h. Holiday and vacation expenses ownership is transferred to him, the value is equal
i. Educational assistance to the employee or his to the FMV or Zonal Value of the said property.
dependents. However, if the ownership is not transferred, the
j. Life or Health insurance and other non-life value equal to the depreciation value of the
insurance benefits in excess of what the law property.
allows.
7. Special valuation of certain FB’s/ Determination of
2. The above FB’s are subject to final withholding tax.
Monetary Value (MV)
(Maximum tax rate for the individual taxpayer
1. Housing privilege
32%; 25%; 15%)
a. If employer leases a residential property for
3. FBT is computed based on the grossed up
use of its employee:
monetary value (GUMV) of the benefits.
MV=_______________
Monetary value ÷ (100%- maximum tax rate for the
b If employer assigns its residential property for
individual taxpayer) = GUMV
use of its employee:
4. FB’s which are not subject to FBT:
MV=_______________
a. Those authorized and exempted from tax under
c. If employer purchases a residential property on
special laws
instalment to be used by its employee (but w/o
b. Those given to rank and file employees
transfer of ownership)
c. Contributions of the employer for the benefit of the
MV=_______________
employees to retirement, insurance and
d. If employer purchase a residential property
hospitalisation benefit plans.
and transfer ownership to the employee:
d. Those required by the nature of employers
MV=_______________
business or for the employers convenience.
e. Employer purchases a residential property and
e. De minimis benefits - benefits of relatively small
sells it to the employee at less than the
value to promote the health, contentment, goodwill
employer’s acquisition cost.
or efficiency of the employees.
MV=_______________
5. The following are de minimis benefits which are
not subject to income tax or FBT: 2. Motor vehicle
a. Monetized unused vacation leave credits of a. Employer purchases the motor vehicle in the
PRIVATE employees not exceeding ten (10) days name of the employee
during the year AND THE MONETIZED VALUE OF MV=_______________
LEAVE CREDITS PAID TO GOVERNMENT OFFICIALS b. Employer purchases a car on installment in the
AND EMPLOYEES; name of the employee
b. Medical cash allowance to dependents of MV=_______________
employees not exceeding P750.00 per employee c. Employer shoulders only a portion of
per semester of P125 per month; acquisition cost of the motor vehicle in letter a
c. Rice subsidy of P15000.00 or one (1) sack of 50- above
kg. Rice per month amounting to not more than MV=_______________
P1,500.00; d. Employer owns and maintains a fleet of motor
d. Uniform and clothing allowance not exceeding vehicle for use of the business and employees
P4,000 per month; MV=_______________
e. Actual yearly medical benefits not exceeding e. Employer rents/ leases a motor vehicles for
Pl0,000 per annum; use of employee
f. Laundry allowance not exceeding P300 per month; MV=_______________
g. Employees achievement awards, e.g., for length of 3. Interest on loan
service or safety achievement, which must be in a. If employer lends money to his employee:
the form of a tangible personal property other than MV=_______________
cash or gift certificate, with an annual monetary
value not exceeding P10,000 received by the FBT Exercises:
employee under an established written plan which 1. Mr. Gungjung, married, an executive of Jewel in
does not discriminate in favor of highly paid the Palace Corp. had the following data for the 1 st
employees; Q. of 200A:
h. Gifts given during Christmas and major Vacation & trip to China paid by the Co. P200,000
anniversary celebrations not exceeding P5,000 per Grocery & other home expenses paid
employee per annum; by the Co. P150,000
i. Flowers, fruits, books, or similar items given to Salary for 3 mos. (P30T/month) P 90,000
employees under special circumstances, e.g., on
EXCEL PROFESSIONAL SERVICES, INC.

a. The FBT for the 1st Q. is 5. Based on no. 2 but the company owns the house &
_____________________ assign it to Mr. Reyes for his personal use.
b. The FBT is payable on The FBT is ____________.
______________________ 6. ABC Co. purchased a motor vehicle in installment. The
c. Mr. G’s taxable income for the year 200A is (1 cost is P500,000 & gave it to Mr. Valdez for his use,
year) _________________ the FBT is _________________.
d. FBT if Mr. G is NRA not ETB
_________________ 7. PSBA purchased a car for P800T & transferred its
e. FBT if he is a SAE ownership to Mr. Punzalan, the FBT is_________.
_________________________
8. Based on #7 but the Co. shouldered only P500T of the
2. Fighting Cock Corp. leased an apartment for the cost, the FBT is ____________.
use of Mr. Reyes, one of its managers; the rent per
month is P20,000. 9. ABC Co. owns a fleet of motor vehicle, it assigned one
a. The monetary value of the benefit is____________ vehicle to Mr. X an executive of the Co. for his
b. The FBT is __________________________ personal use, its cost is P350T and another vehicle for
his use office use only worth P400T.
3. Based on no. 2, but the corporation purchased the The FBT is ___________.
apartment & transferred its ownership to Mr. Reyes
for his personal use, (FMV is P1.5M; Zonal Value is 10. ABC Co. rented a car for P10T/month for use of Mr. X,
P2.5M; acquisition cost is P2M) its executive. The FBT is __________.
FBT is ______________________
11. Anton Bank lends P1M to Mr. Gloria, one of its
4. Based on no.3 but the corporation later sold the managers only 5% per annum for 3mos. The
house to Mr. Reyes for P1M, the FBT FBT is ____________.
is___________.
12. FBT as to who bears the burden is________.

Identification: Identify whether the following are
subject to fringe benefit tax (SUBJ) or not subject to
benefit tax (NOT SUBJ):
a) Fringe benefit required by the nature of or
necessary to trade, business of the employer
b) Fringe benefit for the convenience or advantage of
the employer
c) Fringe benefit given to rank and file employee
d) Housing privilege of the Armed Forces of the
Philippines
e) Housing units situated inside or adjacent to
business or factory (located within 30 meters from
the perimeter of business)
f) Temporary housing for an employee who stays in
the housing unit for 3 months or less
g) Representation and entertainment allowances
which are fixed in amount and regularly received
by employee.
h) Use by employee of aircraft (including helicopters)
owned/maintained by the employer
i) Cost of economy and business class airplane ticket
for foreign travel
j) De minimis benefits
k) Educational assistance granted to employees
dependents through competitive scheme under
scholarship program of the company
l) Cost of premiums borne by the employer for the
group insurance of his employees
m) Contribution of employer for the benefit of
employee under SSS and GSIS laws
n) Contributions of the employer, insurance and
hospitalization benefit plans

The universe has no favourites-M. Andrews

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