ACC311 3rd Exam Coverage

ACC311 INCOME TAXATION
FINAL
WITHHOLDING
TAX
FINAL WITHHOLDING TAX
Passive Income
- certain passive incomes from sources within the Philippines as enumerated
under the Tax Code
- subject to Final Withholding Tax
Five (5) Passive Incomes:
1) Interest Income Unless exempt, other passive income
2) Dividend Income derived from the Philippines but not in
3) Royalties the list (if any) as well as passive
4) Prizes; and income derived abroad are subject to
5) Other Winnings basic tax.
Passive Income
Passive Income
Passive Income
Passive Income
Passive Income
• A kind of tax which is prescribed on "certain income" (interest income;
dividends, royalties, prizes and winnings) derived from Philippine sources.
• Not creditable against the income tax due of the payee on income subject to
regular rates of tax for the taxable year.
Passive incomes derived from Philippine sources are subject to final taxes
instead of basic tax or graduated tax rates.
Passive incomes derived abroad are subject to basic income tax, therefore,
included in the income tax return of resident citizen taxpayers.
Under this system, payee received the income net of the

applicable tax. The amount of tax withheld by the withholding
agent (payor) is "constituted as a full and final payment" of the
income tax due from the payee on the said income.
For instance, if a resident citizen
taxpayer earned P10,000 interest
income from his bank deposit, the The applicable tax is withheld by
amount to be credited to his bank the payer (bank) and shall remit the
account shall only be P8,000, net of corresponding tax to the BIR.
the 20% final tax on interest income Consequently, the liability for
from bank deposit. payment of the tax rests primarily
on the payor as a withholding
agent.
In case of his failure to withhold the tax or in case

of under withholding, the deficiency tax shall be
collected from the payor/withholding agent.
The payor is required to issue final withholding tax

certificate to the payee. The payee, on the other hand, is
not required anymore to file an income tax return for
these types of income. Likewise, these incomes will no
longer form part of the payee's "taxable income".
FINAL WITHHOLDING
TAX
FINAL WITHHOLDING
TAX
FINAL WITHHOLDING
TAX
CAPITAL
GAINS
TAX
CAPITAL GAINS TAX
Income derived from sale of capital assets, specifically: Capital assets are assets
• from sale of shares of stocks of a closely held corporation not used in business nor
[shares of domestic corporation not listed in the local for sale in the Ordinary
stock exchange) and; course of trade or
business.
• from sale of real properties located in the Philippines
Otherwise, subject to basic/regular tax or graduated tax rate.

CAPITAL GAINS TAX
CAPITAL GAINS TAX
The fair market value (FMV} above of real property shall refer to the
higher between:
• Fair market value as provided by City or Provincial assessors (also

known as assessed value or FMV for real property tax declaration
purposes); and
• Zonal value as provided by the Commissioner of Internal Revenue

(CIR)
CAPITAL GAINS TAX
GAIN ON SALE OF ASSETS: Capital Gain vs Ordinary
For income
Gaintaxation purposes, assets are classified either as, ordinary or capital
assets.
The following are ordinary assets:
1. Stock in trade of the taxpayer- or other property of a kind which
would properly be included in the· inventory of the taxpayer if on hand
at the close of taxable year.
2. Property used in trade or business subject to depreciation.
3. Real property held by the taxpayer primarily for sale to customers in
the ordinary course of trade or business.
4. Real property used in trade or business of the taxpayer
CAPITAL GAINS TAX
Gain
Capital assets include all other property held by the taxpayer (whether or
not connected with his trade or business) not included in the definition
of ordinary assets.
Property classification of an asset as capital or ordinary is important

because of the special tax rules on gains and losses from sales or
exchanges of capital assets which do not apply to gains and losses from
sale or exchanges of ordinary assets.
CAPITAL GAINS TAX
Gain
Gain on sale of ordinary assets are commonly known as ordinary or

regular income. Ordinary gains are subject to the graduated tax rate as
provided for under Section 124(A) of the Tax Code.
CAPITAL GAINS TAX
Capital Gains Tax (CGT) on Sale of Shares of Stock
Beginning January 1, 2018, a fifteen percent (15%) capital gains tax (CGT) is
imposed on capital gain on sale of shares of a domestic corporation sold directly to
a buyer [Section 124(C) of the Tax Code, as amended].
The tax imposed shall be upon the net capital gains realized during the taxable year
from the sale, barter, exchange or disposition of shares of stock.
CAPITAL GAINS TAX
Shares of stock sold or disposed of through the local stock exchange exempt
from income tax. It is not subject to capital gains tax but to a Percentage tax of
6/10 of 1 % of gross selling price as imposed under Section 127 of the Tax Code,
as amended.
It is a business tax known as Stock Transaction Tax and the basis is the gross
selling price. Stock transaction tax is discussed in a separate tax subject entitled
Transfer and Business Taxation
CAPITAL GAINS TAX
Formula:
CAPITAL GAINS TAX
Determination of Amount and Recognition of Gain or Loss: [Sec. 7(c) of RR 6-
2008].
Determination of Selling Price [Sec. 7(c.1) of RR 6-2008].
The following rules shall apply:
◊ In the case of cash sale, the selling price shall be the total consideration per
deed of sale.
◊ If the total consideration of the sale or disposition consists partly in money
and partly in kind, the selling price shall be sum of money and the fair market
value of the property received.
CAPITAL GAINS TAX
Determination of Amount and Recognition of Gain or Loss: [Sec. 7(c) of RR 6-
2008].
◊ In the case of exchange, the selling price shall be the fair market value of the
property received.
CAPITAL GAINS TAX
◊In case the fair market value of the shares of stock sold, bartered, or
exchanged is greater than the amount of money and/or fair market value of the
property received, the excess of the FMV of the shares of stock sold, bartered
or exchanged over the amount of money and the FMV of the property, if any,
received as consideration shall be deemed a gift subject to the Donor's Tax
under Section 100 of the Tax Code, as amended.
CAPITAL GAINS TAX
Determination of Fair Market Value (RR 6-2008 and RR 6-2013 as amended by
RR 20-2020 dated Aug. 17, 2020):
If shares of stock not listed and traded in the local stock exchange, the
following rules shall apply:
◊For Common Shares of Stock, the book value based on the latest available
financial statements duly certified by an independent public accountant prior to
the date of the sale, but not earlier than the immediately preceding taxable year,
shall be considered as the prima facie fair market value.
CAPITAL GAINS TAX
RR 20-2020 dated Aug. 17, 2020):
◊ For Preferred Shares of Stock, the liquidation value, which is equal to the
redemption price of the preferred shares as of balance sheet date nearest to the
transaction date, including any premium and cumulative preferred dividends in
arrears, shall be considered as the fair market value.
CAPITAL GAINS TAX
RR 20-2020 dated Aug. 17, 2020):
◊ In the case of both [common & preferred], the book value per common share
is computed by deducting the liquidation value of the preferred shares from the
total equity of the corporation and dividing the result by the number of
outstanding common shares as of balance sheet date nearest to the transaction
date.
CAPITAL GAINS TAX
Illustration:
CAPITAL GAINS TAX
Illustration:
CAPITAL GAINS TAX
Illustration:
CAPITAL GAINS TAX
Illustration:
CAPITAL GAINS TAX
Capital Gains Tax (CGT) on Sale of Real Properties
• classified as capital asset located in the Philippines
• subject to six percent (6%) capital gains tax (CGT) under Section
124(D) of the Tax Code
The tax imposed shall be based on the gross selling price or fair
market value, whichever is higher.
CAPITAL GAINS TAX
Fair market value of real property shall refer to the higher between:
• Fair market value as provided by City or. Provincial assessors (also

known as assessed value or FMV for real property tax declaration
purposes); and
• Zonal value as provided by the Commissioner of Internal Revenue

(CIR)
CAPITAL GAINS TAX
Section 24(D)(1) of the Tax Code provides that sale, exchange, or

other disposition of real property subject to capital gains tax shall
include pacto de retro sales and other forms of conditional sales, by
individuals, including estates and trusts.
CAPITAL GAINS TAX
Sale of Real Property to the Government
- The taxpayer shall have the option to be taxed at 6% CGT or basic

income tax using the graduated tax rate.
CAPITAL GAINS TAX
CAPITAL GAINS TAX
CAPITAL GAINS TAX
CAPITAL GAINS TAX
CAPITAL GAINS TAX
CAPITAL GAINS TAX
CAPITAL GAINS TAX
CAPITAL GAINS TAX
Sale of Principal Residence
- sale of real property located in the Philippines classified as principal
residence is exempt from capital gains tax
"Principal Residence" is the family home of the individual taxpayer-- a

dwelling house, including the land on which it is situated. An individual
including his family resides as a permanent dwelling, or an individual intends
to return.
CAPITAL GAINS TAX
- Should be certified by the Barangay Chairman, or Building
Administrator, if the residence is a condominium individual
taxpayer's address as indicated in his latest tax return.
- Residential address shown in the latest income tax return filed by

the vendor/transferor immediately preceding the date of sale of said
real property shall be treated as a conclusive presumption about his
true residential address
CAPITAL GAINS TAX
As a rule, sale of principal residence is subject to 6% capital gain

tax based on the selling price or fair market value, whichever is
higher, except, when the proceeds are fully utilized in acquiring or
constructing a new principal residence subject to the following
conditions:
CAPITAL GAINS TAX
• The proceeds is fully utilized in acquiring or constructing a new

principal residence within eighteen (18) calendar months from
the date of disposition.
• The historical cost or adjusted basis of the real property sold or
disposed shall be carried over to the new principal residence
built or acquired.
CAPITAL GAINS TAX
3. The BIR shall have been duly notified by the taxpayer within 30
days from the date of sale or disposition through a prescribed
return of his intention to avail of the tax exemption.
4. The tax exemption can only be availed of once very 10 years.
DEALINGS
IN
PROPERTY
DEALINGS IN PROPERTY
- disposal of assets (ordinary or capital assets) either through sale or exchanges
Revenue regulations 07-2003 provides that "Real Property" shall have the same
meaning attributed to the term as described under Article 415 of RA386,
otherwise known as the Civil Code of the Philippines.
Applicable Income Taxes for Capital Gains and Ordinary Gains
Capital Gain on:
- Sale of shares of domestic - Subject to 15% CGT on capital gain
corporations directly to a buyer
- Sale of shares of domestic - Not subject to income tax regardless of

corporations through local _stock whether the transaction resulted to a gain· or
exchange loss. It is subject to stock transaction tax of6/10
of 1% of gross selling price under the TRAIN
Law
Capital Gain on:
- Sale of real properties - Subject to 6% capital gains tax based on the
classified as capital assets in the highest amount among the selling price, fair
Philippines market value and zonal value.
- Sale of real properties classified - Either 6% capital gains tax or basic tax
as capital assets in the Philippines at the option of the taxpayer
to the gov't, its agencies or
GOCCs by an individual taxpayer
Capital Gain on:
- All Other types of capital - Subject to basic income tax. Part of the
gains other than those taxpayer's taxable income but subject to rules
previously enumerated on capital gains and losses
Ordinary Gain
- Subject to basic tax. Thus, it shall form part of the
taxpayer's taxable income
Rules in the Recognition of Capital Gains and Losses
1. The transaction must involve property classified as capital asset.
2. The transactions must arise, generally, from sale or exchange.
3. Net capital gains are added to ordinary gains. However, if the result is a net
capital loss, such loss can be deducted from the capital gain. Required by the law
that only necessary expenses are allowed as deductions from gross income.
4. Holding Period (only applicable to individual taxpayers, estates, and trusts)-- 12
months or less: 100%, more than 12 months: 50%
5. Net Capital Loss Carry-Over (only applicable to individual taxpayers)
Rules in the Recognition of Capital Gains and Losses
Any loss sustained by a domestic bank or any trust company from sale of bonds,
debentures, notes or certificate or other evidences of indebtedness issued by any
corporation, including those issued by the government is considered as an ordinary
loss deductible from ordinary income.
Computation of Gains and Losses
The difference between the amount of value received by the taxpayer over the
determined value of the property he has disposed of arising from sale, and/or
exchange of assets.
Cost Basis of Property Sold of Exchanged
- acquired by purchase - cost (purchase price + expenses
of acquisition)
- should be included in the - latest inventory value
inventory
- acquired by devise, bequest, or - fair market value as of the date

inheritance of acquisition
- acquired by gift or donation - in the hands of the donor or at last preceding
owner by whom it was not acquired by gift,
except that if such basis is greater than the
FMV of the property at the time of the gift
then, the basis shall be such FMV
- acquired for less than an - amount paid by the transferee for the
adequate consideration in money’s property, or transferor's adjusted basis at the
worth (other than capital asset) time of the transfer whichever is
greater/higher.
Illustration:
Illustration:
FRINGE
BENEFIT
TAX
FRINGE BENEFIT TAX
- "compensation" under Section 2.78.1 (A) of RR 2-98, as amended, refers to all
remuneration for services performed by an employee for his employer
- salaries, wages, emoluments and honoraria, allowances, commissions, fees

including director's fees, if the director is, at the same time, an employee of the
employer/corporation
- taxable bonuses and fringe benefits except those which are subject to the
fringe benefits tax under Section 33 of the Code
- taxable pensions and retirement pay
- other income of a similar nature constitute compensation income
FRINGE BENEFIT TAX
- goods, service or other benefits furnished or granted by an employer in cash or
in kind, other than the basic compensation, by an employer to an individual
employee (except rank-and-file employees)
- a form of pay which may be in the form of property, services, cash or cash
equival nt to supplement a stated pay for the performance of services.
- benefits given or furnished to a managerial or supervisory employee.

FRINGE BENEFIT TAX
FRINGE BENEFIT TAX
Employees
Rank-and-File Managerial
- An employee holding neither - Vested with powers of
managerial nor supervisory prerogatives to lay down and
position execute management policies
Supervisory
- Effectively recommend such managerial
actions if the exercise of such authority is
not merely routinary but requires the use
of independent judgement
FRINGE BENEFIT TAX
Nature of FB Tax
- a final tax imposed on the employee withheld by the employer computed at
35% (upon effectivity of TRAIN law) on the grossed-up monetary value
(GUMV) of the fringe benefit granted
- shall be withheld and remitted by the employer to the BIR not later than the
last day of the month following the close of the quarter during which
withholding was made
FRINGE BENEFIT TAX
Items of Fringe Benefits subject to Tax
1) Housing
2) Expense account
3) Vehicle of any kind
4) Household personnel, such as maid, driver and others
5) Interest on loan at less than market rate to the extent of the difference
between the market rate and actual rate granted
FRINGE BENEFIT TAX
Items of Fringe Benefits subject to Tax
6) Membership fees, dues and other expenses borne by the employer for the
employee in social and athletic· clubs and similar organizations
7) Expenses for foreign travel
8) Holiday and vacation expenses
9) Educational assistance to the employee or his dependents
10) Life or health insurance and other non-life insurance premiums or similar
amounts in excess of what the law allows
FRINGE BENEFIT TAX
Tax Exempt from FB
1) Authorized and exempted from income tax under any special law, such as
Contributions required under SSS law and GSIS law, similar contributions
under an existing law, and premiums for group insurance
2) Required by the nature of, or necessary to the trade, business or profession
of the employer
3) De minimis benefits
4) For the convenience or advantage of the employer
FRINGE BENEFIT TAX
Computation
- generally, fringe benefit tax rate is 35% (upon effectivity of TRAIN law)
- FBT rate for nonresident alien not-engaged in trade or business (NRA-
NETB) is 25%
FRINGE BENEFIT TAX
Computation
1) determine the monetary value
2) determine the percentage (gross money factor) of the benefit
3) determine the grossed-up monetary value of the fringe benefit by dividing
the monetary value of the fringe benefit by the gross monetary value factor;
and
4) multiply the grossed-up monetary value factor by the FBT rate
FRINGE BENEFIT TAX
Rates
FRINGE BENEFIT TAX
Illustration
FRINGE BENEFIT TAX
Illustration
FRINGE BENEFIT TAX
Grossed-Up Monetary Value
The grossed-up monetary value of the fringe benefit represents the entire
income earned by the employee.
This includes the net amount of money received or the net monetary value of
any property received (known as "monetary value”) and the amount of FBT
received by the employee from the employer.
FRINGE BENEFIT TAX
Valuation
• If granted in money, the value is the amount granted.
• If granted in property and ownership is transferred to the employee, the
value is the fair market value of the property.
• If granted in property but ownership is not transferred to the employee, the
value is equal to the depreciation value of the property
FRINGE BENEFIT TAX
Deductible expense of the employer
If the fringe benefit is given to a rank-and-file employee, or to a supervisory
or managerial employee, but is not subject to FBT, the deduction for the
employer is the monetary value of the fringe benefit.
On the other hand, if the fringe benefit is given to a supervisory or managerial

employee and is subject to FBT, the deduction. is the grossed-up monetary
value of the fringe benefit which compose of the FB expense and the FBT.
FRINGE BENEFIT TAX
De Minimis Benefits
- facilities and privileges such as entertainment, medical services or so called
"courtesy" discounts on purchases
- not considered as compensation subject to income tax and consequently to
withholding tax, if such facilities or privileges are of relatively small value
and are offered or furnished by the employer merely as means of promoting
the health, goodwill, contentment or efficiency of his employees
- exempt from withholding tax on compensation and fringe benefits tax,

regardless of the position of the employee
FRINGE BENEFIT TAX
De Minimis Benefits
1) Monetized unused vacation leave credits of private employees not
exceeding “10 days” during the year
2) Monetized value of vacation and sick leave credits paid to government
officials and employees
3) Medical cash allowance to dependents of employees not exceeding P1 ,500
per semester or P250 a month
4) Rice subsidy of not more than P2,000 per month or 1 sack (50kg.) rice per
month
5) Uniforms given to employees by the employer not exceeding P6,000 per
annum
FRINGE BENEFIT TAX
De Minimis Benefits
6) Actual medical assistance given not exceeding P.10,000 per annum
7) Laundry allowance not exceeding P300 per month
8) Employee achievement awards
9) Gifts given during Christmas and major anniversary celebrations not
exceeding P5,000 per employee per annum
10) Daily meal allowance for overtime work and night/graveyard shift not
exceeding 25% of the basic minimum wage on a per region basis provided
such benefit is given on account of overtime work or if given to employees on
night/graveyard shift
FRINGE BENEFIT TAX
De Minimis Benefits
11) Benefits received by an employee by virtue of a collective bargaining
agreement (CBA) and Productivity incentive schemes provided that the total
annual monetary value received from the two (2) previous items combined, do
not exceed P10,000 per employee per taxable year
FRINGE BENEFIT TAX
Excess of De Minimis Benefits over their respective ceilings
The amount of de minimis benefits conforming to the ceiling of de minimis
benefits shall not be considered in determining the P90,000 ceiling of “other
benefits" excluded from the gross income.
The excess of the de minimis benefits over their respective ceilings prescribed
shall be considered as part of other benefits subject to tax only on the excess
over the P90,000 ceiling.
FRINGE BENEFIT TAX
Excess of De Minimis Benefits over their respective ceilings
All other benefits given by employers which are not included in the
enumeration of de minimis benefits shall not be considered de minimis
benefits but should fall under the classification of "other benefits" and is
therefore subject to the P90,000 ceiling.
FRINGE BENEFIT TAX
P90,000 Ceiling for 13th month pay/bonuses and “Other
Benefits”
Exempt from income tax and creditable withholding tax on compensation,
provided, however, that beginning January 1, 2018, the total exclusion shall
not exceed P90,000.
Otherwise, the excess would form part of an individual's gross income and
would be subject to income tax and applicable creditable withholding taxes.
FRINGE BENEFIT TAX
Benefits”
“Other Benefits” include:
1) Christmas Bonus
2) Productivity Incentive Bonus
3) Loyalty Awards
4) Gifts in cash or in kind and other benefits of similar nature actually
received by officials and employees of both government and private
offices
FRINGE BENEFIT TAX
Benefits”
This exclusion from gross income is not applicable to:

1) Self-employed individuals; and
2) Income generated from business
FRINGE BENEFIT TAX
Fixed or Variable Allowances
- Compensation subject to income tax and consequently, creditable
withholding tax on compensation income
Examples:
- transportation allowance
- representation allowance
- communication allowance
- living away from home allowance (LAFHA), and the like.
FRINGE BENEFIT TAX
Fixed or Variable Allowances
Reasonable amounts of reimbursements/advances for travelling and

entertainment expenses which are pre-computed on a daily basis and are
paid to an employee while he is on an assignment or duty need not be
subject to the requirement of substantiation and to withholding.
FRINGE BENEFIT TAX
Business related expenses/Allowances subject to liquidation
Any amount paid specifically, either as advances or reimbursements for

travelling, representation, and other bona fide ordinary and necessary
expenses incurred or reasonably expected to be incurred by the employee
in the performance of his duties are not compensation subject to
withholding.
FRINGE BENEFIT TAX
Business related expenses/Allowances subject to liquidation
If the following conditions are satisfied:

■ It is for ordinary and necessary travelling and representation or
entertainment expenses paid or incurred by the employee in the pursuit
of the trade, business or profession; and
■ The employee is required to account/liquidate for the foregoing
expenses in accordance with the specific requirements of substantiation
for each category of expenses
FRINGE BENEFIT TAX
Representation and Transportation Allowance (RATA)
Certain officials and employees of the government are considered
reimbursements for the expenses incurred in the performance one’s duties
rather than as additional compensation.
However, the excess of RATA, if not returned to the employer, constitutes
taxable compensation income of the employee.
FRINGE BENEFIT TAX
Communication Allowance (Phone Allowance)
Not subject from fringe benefit tax and tax on compensation on the basis
that communication allowance is deemed required by the nature of the job
of the employees and deemed necessary to business and redounds to the
convenience and benefit.
FRINGE BENEFIT TAX
Illustration:
FRINGE BENEFIT TAX
FRINGE BENEFIT TAX
FRINGE BENEFIT TAX
Non-Taxable Housing Benefits
1) Housing unit inside or adjacent within 50 meters from the perimeter of
the business premises
2) Temporary housing for a stay in the housing unit for three months or less
3) Housing privilege of military officials of the Armed Forces of the
Philippines
FRINGE BENEFIT TAX
Other Fringe Benefits
The value of the benefit representing the amount given or paid by the
employer should also be the "monetary" value of the benefit.
1) Expense Accounting
a) Taxable as fringe benefits (personal expenses)
b) Non-taxable fringe benefits (representation and transportation
allowance given regularly)
2) Expenses for foreign travel

FRINGE BENEFIT TAX
3) Educational assistance to the employee or his dependents

a) directly connected with the employer's trade, business or profession and
there is a written contract between employee and employer
b) through a competitive scheme under scholarship program of the
company
FRINGE BENEFIT TAX
4) Membership dues or fees of employees borne by employer in social and

athletic clubs or other similar organizations
5) Life or health insurance and other non-life insurance premiums are
treated as taxable benefits
FRINGE BENEFIT TAX
6) The following shall not be treated as fringe benefits:
a. Fringe benefits which are authorized and exempted from income tax
under the Tax Code or under any special law.
b. The fringe benefit is required by the nature of or necessary to the trade,
business or profession of the employer.
c. When the fringe benefit is for the convenience or advantage of the
employer.
d. Contributions of the employer for the benefit of the employee to
retirement, insurance and hospitalization benefit plans.
FRINGE BENEFIT TAX
6) The following shall not be treated as fringe benefits:
e. Benefits given to rank-and-file employees
f. Non-taxable housing benefits
g. Other non-taxable benefits
FRINGE BENEFIT TAX
Use of Aircraft and Helicopters
The Use of aircraft and helicopters owned and maintained by the employer
is not a taxable fringe benefit but treated as business expense of the
employer.
Thank You
Prepared by: Rasyl Mae Lamanilao

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ACC311 INCOME TAXATION

Under this system, payee received the income net of the

In case of his failure to withhold the tax or in case

The payor is required to issue final withholding tax

Otherwise, subject to basic/regular tax or graduated tax rate.

• Fair market value as provided by City or Provincial assessors (also

• Zonal value as provided by the Commissioner of Internal Revenue

Property classification of an asset as capital or ordinary is important

Gain on sale of ordinary assets are commonly known as ordinary or

• Fair market value as provided by City or. Provincial assessors (also

• Zonal value as provided by the Commissioner of Internal Revenue

Section 24(D)(1) of the Tax Code provides that sale, exchange, or

- The taxpayer shall have the option to be taxed at 6% CGT or basic

"Principal Residence" is the family home of the individual taxpayer-- a

- Residential address shown in the latest income tax return filed by

As a rule, sale of principal residence is subject to 6% capital gain

• The proceeds is fully utilized in acquiring or constructing a new

- Sale of shares of domestic - Not subject to income tax regardless of

- acquired by devise, bequest, or - fair market value as of the date

- salaries, wages, emoluments and honoraria, allowances, commissions, fees

- benefits given or furnished to a managerial or supervisory employee.

On the other hand, if the fringe benefit is given to a supervisory or managerial

- exempt from withholding tax on compensation and fringe benefits tax,

This exclusion from gross income is not applicable to:

Reasonable amounts of reimbursements/advances for travelling and

Any amount paid specifically, either as advances or reimbursements for

If the following conditions are satisfied:

2) Expenses for foreign travel

3) Educational assistance to the employee or his dependents

4) Membership dues or fees of employees borne by employer in social and

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