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    Income Taxation

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    Ericah Dumalagan
    The document discusses four examples of calculating fringe benefit tax in the Philippines. In the first example, the fringe benefit tax for providing a condominium unit to an executive is P80,769. In the second example, if ownership of the condo is transferred to the executive, the fringe benefit tax is P3,661,538. The third example calculates a fringe benefit tax of P538,462 for transferring a property to an executive at a lower price. The fourth example calculates a P1,000,000 fringe benefit tax for providing a P3,000,000 car to a non-resident executive.

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    Income Taxation

    Uploaded by

    Ericah Dumalagan
    66 views2 pages
    The document discusses four examples of calculating fringe benefit tax in the Philippines. In the first example, the fringe benefit tax for providing a condominium unit to an executive is P80,769. In the second example, if ownership of the condo is transferred to the executive, the fringe benefit tax is P3,661,538. The third example calculates a fringe benefit tax of P538,462 for transferring a property to an executive at a lower price. The fourth example calculates a P1,000,000 fringe benefit tax for providing a P3,000,000 car to a non-resident executive.

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    Income Taxation

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    The document discusses four examples of calculating fringe benefit tax in the Philippines. In the first example, the fringe benefit tax for providing a condominium unit to an executive is P80,769. In the second example, if ownership of the condo is transferred to the executive, the fringe benefit tax is P3,661,538. The third example calculates a fringe benefit tax of P538,462 for transferring a property to an executive at a lower price. The fourth example calculates a P1,000,000 fringe benefit tax for providing a P3,000,000 car to a non-resident executive.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    66 views2 pages

    Income Taxation

    Uploaded by

    Ericah Dumalagan
    The document discusses four examples of calculating fringe benefit tax in the Philippines. In the first example, the fringe benefit tax for providing a condominium unit to an executive is P80,769. In the second example, if ownership of the condo is transferred to the executive, the fringe benefit tax is P3,661,538. The third example calculates a fringe benefit tax of P538,462 for transferring a property to an executive at a lower price. The fourth example calculates a P1,000,000 fringe benefit tax for providing a P3,000,000 car to a non-resident executive.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 2

    1. In 2018 Delta Corporation bought a condominium unit on installment for the use of its executive.

    The
    acquisition cost inclusive of 12% interest is P6,720,000. The fair market value of the property per tax
    declaration is P6,800,000 while the zonal value is P6,500,000.

    A. How much is the Fringe Benefits Tax?

    Cost with interest P6,720,000

    Divide 112%

    Cost without interest P6,000,000

    Multiply 5%

    Value of the Benefit 300,000

    Multiply 50%

    Monetary Value of the Benefit 150,000

    Divide 65%

    Gross-up Monetary Value 230,769

    Multiply 35%

    Fringe Benefit Tax P 80,769

    B. Assuming that the ownership over the property will be transferred to the executive, how
    much is the fringe benefit tax?

    Fair Market Value P6,800,000

    Acquisition Cost 6,720,000

    Higher of the two value 6,800,000

    Multiply 100%

    Monetary Value of the Benefit 6,800,000

    Divide 65%

    Gross-up Monetary Value 10,461,538

    Multiply 35%

    Fringe Benefit Tax 3,661,538


    2. Delta Corporation bought a condominium unit for P6,000,000. The fair market value of the property
    per tax declaration is P6,800,000 while the zonal value is P6,500,000. It was transferred in the name od
    Pedro, one of its executives, for a lower consideration amounting to P5,800,000. How much is the fringe
    benefits tax?

    Real Property Tax Declaration P 6,800,000

    Zonal Value 6,500,000

    Higher of two Values P 6,800,000

    Cost to Pedro 5,800,000

    Monetary Value of the Benefit (6.8M-5.8M) 1,000,000

    Gross-up Monetary Value of the Benefit (1,000,000/65%) 1,538,462

    Fringe Benefit Tax (1,538,462 x 35%) 538,462

    3. Omega Corporation purchased a motor vehicle worth P1,400,000 for the use of its executive. It was
    register under the executive’s name despite the agreement that it should be used partly for the
    company’s benefit. How much is the fringe benefit tax?

    Cost of the motor vehicle P1,400,000

    Gross-up Market Value of the Benefit (P1,400,000/65%) 2,153,846

    Fringe Benefit Tax (2,153,846 x 35%) 753,846

    4. First Mero Pacific was able to persuade Francis to join the company as its Assistant Vice President for
    Finance which included a car plan worth P3,000,000 in its compensation package. The company
    purchased the vehicle and registered the same in favor of Francis. Assuming further that Francis is a
    non-resident alien not engaged in trade or business, how much is the fringe benefit tax?

    Cost of the car P 3,000,000

    Gross-up Market Value of the Benefit (3,000,000/75%) 4,000,000

    Fringe Benefit Tax (4,000,000 x 25%) 1,000,000

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