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Assignment No. 4

This document is an assignment on taxation of fringe benefits in the Philippines. It provides 10 problems involving determining whether various benefits provided to employees are subject to basic tax, fringe benefit tax, or are exempt. The benefits include housing allowances, vacation leave payouts, transportation allowances, medical benefits, and more. Students are asked to indicate which type of tax applies for each benefit, and to calculate taxable amounts and taxes owed for scenarios involving benefits provided to employees.

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Paula Villarubia
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198 views

Assignment No. 4

This document is an assignment on taxation of fringe benefits in the Philippines. It provides 10 problems involving determining whether various benefits provided to employees are subject to basic tax, fringe benefit tax, or are exempt. The benefits include housing allowances, vacation leave payouts, transportation allowances, medical benefits, and more. Students are asked to indicate which type of tax applies for each benefit, and to calculate taxable amounts and taxes owed for scenarios involving benefits provided to employees.

Uploaded by

Paula Villarubia
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ASSIGNMENT NO. 4
Name:_________________________________
Section:________________________________

I. Determine if the following incomes are subject to basic tax, fringe benefit tax or exempt from
tax by putting a check mark in the column provided below. If the value of the benefit is provided,
indicate the correct amount of deductible expense of the employer.

Amount Subjec Subject Exemp Deductible


of Benefit t to to Basic t Expense of the
FBT Tax Employer
1. Officer’s expense account not P120,000
subject to liquidation
2. Officer’s expense account subject 80,000
to liquidation
3. Personal expenses of the company 50,000
officers, paid for or reimbursed by
the company-employer
4. Annual uniform allowances granted 5,000
to an executive
5. Housing benefits of officials of the 360,000
Philippine Army
6. Housing benefits of officials of a 250,000
domestic corporation
7. Housing unit furnished to an 45,000
employee, where said unit was
situated inside or adjacent to the
premises of the business
8. Monetized unused vacation leave 15,000
credits not exceeding 10 days
9. Household personal benefit by an 60,000
officer of a domestic corporation
10. Annual medical cash allowance to 1,500
dependents

II. PROBLEM SOLVING


1. In 2019, Villar Realty Corporation paid P325,000 to Wilderness Resort on August 6,
representing vacation expenses of Cynthia, an executive of Villar Realty Corporation. Answer
the following:
a. Is this a taxable fringe benefit?
b. How much is the tax base of the fringe benefit?
c. Should the taxable fringe benefit the included in the compensation income of Cynthia for
the year?
d. How much is the fringe benefit tax collected?
e. When is the fringe benefit tax remitted?
f. Assuming Cynthia is a rank and file employee, is the fringe benefit subject to fringe
benefit tax?
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ASSIGNMENT NO. 4
Name:_________________________________
Section:________________________________
2. Alyssa is a resident citizen employed by Chris Sports, Incorporated. She received the
following from his employer during 2019:
Basic compensation income P900,000
13th month pay 75,000
P3,000 monthly transportation allowance 36,000
Productivity incentive pay 10,000
Christmas bonus 25,000
Uniform allowance 15,000
Actual medical allowance 10,000
Rice subsidy 24,000

Required: Determine Alyssa’s taxable net income.

3. A rank and file employee received the following compensation and benefits received during
2019:
Basic compensation income P540,000
13th month pay 45,000
Mid-year bonus 22,500
Christmas gift 10,000
Uniform allowance 7,500
Actual medical allowance 15,000
Medical allowance to dependents 2,000
Rice subsidy 18,000
Monetized vacation leave for 12 days (P2,000/day) 24,000

Required: Determine the employee’s taxable net income.

4. XYZ Co. leased a residential house for the use of its branch manager. The rent per
agreement was P165,000 per month.
a. How much is the monetary value of the benefit for the month?
b. How much is the fringe benefit tax for the month?

5. EMPI Inc. owns a residential property which is assigned to its officer for use. The following
data pertain to the residential property.
Cost P5,000,000
Fair market value per BIR 4,500,000
Fair market value per Assessor’s office 3,000,000

a. How much is the monetary value of the benefit of the quarter?


b. How much is the fringe benefit tax for the quarter?

6. Using the same data in no. 5, and assuming that EMPI Inc. transferred the ownership of the
residential property in the name of the officer, answer the following:
a. How much is monetary value of the benefit?
b. How much is the fringe benefit tax?
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ASSIGNMENT NO. 4
Name:_________________________________
Section:________________________________
7. Chen Company purchased a motor vehicle for the use of its manager. The vehicle was
registered in manager’s name. The cost of the vehicle was P1,200,000 used partly for personal
purposes and partly for the benefit of the company. Compute the following:
a. Monetary value of the benefit
b. Fringe benefit tax

8. Using the same date in no. 7 and assuming that Chen shouldered only a portion of the cost of
the car in the amount of P800,000 and the balance paid by the manager, determine the
following:
a. Monetary value of the benefit
b. Fringe benefit tax

9. Using the same data in no. 7 and assuming that Chen purchased the car in the name of the
manager on installment basis. Determine the following:
a. Monetary value of the benefit
b. Fringe benefit tax

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