Chapter 11 Flashcards
These are goods, services, or other benefits furnished by the employer to the employees.
Fringe benefits
This is the fixed regular salary or wages of employees every payroll period.
Basic pay
Fringe benefits that are fixed every payroll period are considered?
Regular compensation
Fringe benefits that are variable and performance-based are considered?
Supplemental compensation
Fringe benefits in the form of incentives are considered?
13th month pay and other benefits
Fringe benefits furnished for the employer’s convenience or necessity are?
Exempt from tax
These are highly privileged incentives given only to a special group of employees. It is non-performance based.
Perquisite benefits
When an expense takes the nature of an employee personal expense or expenditure and is paid or assumed by the employer, it is deemed as? Even if the expense is receipted int he name of the employer.
Fringe benefit
These are expenses which is purported partly for business and partly for employer’s incentive.
Hybrid expenses
How much of hybrid expenses are subject to FBT?
50%
This states that if an expense is necessitated by the nature of trade, business, or profession of the employer, or is furnished principally for the employer’s convenience or advantage, it is an ordinary business expense.
Necessity or convenience of the employer rule
or
Doctrine of necessity or employer convenience
This is a final tax imposed on the fringe benefit furnished, granted or paid by the employer to employee.
FBT
Are all fringe benefits subject to FBT?
No
True or False: Fringe benefits are exclusively cash.
False. It may be in cash or in kind.
what is HEVHIMTHEL
When is FBT due?
Quarterly
This refers to the taxable amount of benefits taken home or realized.
Monetary value
This is the complement of FBT.
Gross up rate
GR is when there is conveyance, the monetary value is how much of the benefit?
100%
GR is when there is no conveyance, the monetary value is how much of the benefit?
50%
What is the monetary value of benefits paid in kind?
Higher between:
BV of thing
FV of thing
How many years is the presumptive useful life of real and movable properties?
real - 20 years
movable - 5 years
What is the maximum distance from the business premise should the housing unit of an employee be to be exempt from FBT
50meters
What is the monetary value of an expense account?
Amount paid by employer
Fixed or regular RATA is treated as?
Part of compensation income
What is the monetary value of household expenses?
The amount paid
What percentage is compared with the interest on loan foregone to get its market value?
12%
Expenses for foreign travel is exempt but are under what rule?
Substantiation rule
What is the substantiation requirement?
There must be evidence to said expenses for it to be exempt
How are expenses for the family members of the employee shouldered by employer treated as?
Taxable fringe benefits
When is education assistance to the employee or his dependents exempt?
- it is connected with the employer’s business
- there is a written contract
What is the FBT rate for residents or citizens and NRAs?
RC - 35%
NRA - 25%
