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BENEFITS
TAX
Definition Section 33 (B) of the NIRC
any good, service, or other benefit furnished or
granted by an employer, in cash or in kind, in addition to
basic salaries, to an individual employee such as but not
limited to the following:
a. Housing
b. Expense account
c. Vehicle of any kind
d. Household personnel
e. Interest on loan
f. Membership fees, dues and other expenses
g. Expenses for foreign travel
h. Holiday and vacation expenses
i. Educational assistance
j. Life or health insurance and other non-life insurance
premiums
Summary
INCOME DISTRIBUTION
32%
General Rule 1: If fringe benefit is granted IN MONEY, or is
directly paid for by the employer
Rules
Value: amount granted or paid for
Vehicles
the name of the employee
Account
2. Expenses paid by the employee but reimbursed by
his employer; if the expenditures are duly receipted
for and in the name of the employer and do not
partake the nature of personal expenses attributable
to the employee, the same shall not be subject to
FBT
3. Personal expenses of the employee paid for or
reimbursed by the employer whether or not the same
are duly receipted for in the name of the employer
Household Expenses of the employees which are borne by the
employer for household personnel shall be treated as
Expenses
taxable fringe benefits
on Loan
interest foregone by the employer of the difference
of the interest assumed by the employee and the
12% rate shall be treated as taxable fringe benefit
At less than ii. Benchmark interest rate of 12% shall remain in effect
Market Rate until revised by a subsequent regulation
iii. This regulation shall apply to installment payments
or loans with interest rate lower than 12% starting
January 1, 1998
Membership Expenses borne by the employer for the employee in
social and athletic clubs or other similar organizations
for Foreign
travel for the purpose of attending business meetings or
conventions shall not be treated as taxable fringe benefits
Travel Exceptions:
1. Lodging cost incurred in excess of an average of $300
per day
2. 30% of the cost of the first class airplane ticket
and
Vacation
Expenses
Educational
General Rule Exception
1. Cost of educational assistance Scholarship grant to the
Assistance
to the employee which are borne employee by the employer
by the employer provided the ff. conditions are
met:
- Education is directly
connected with employers
trade, business or profession
- There is a written contract
that the employee is under
obligation to remain in the
employ of the employer for
the period mutually agreed
upon
Benefits
non-life insurance premiums borne by the employer for
his employee shall be treated as taxable fringe benefit
Exceptions:
1. Contributions pursuant to the provisions of existing
law such as under the SSS or GSIS or similar
contributions arising from the provisions of any other
existing law
2. Cost of premiums for the group insurance of the
employers employees
FBT on
Recipient Tax Rate Tax Base
1. Nonresidential alien individual (NETB) 25% 75%
Benefits not
law
2. Contributions for retirement, insurance, and
hospitalization benefit plans
subject to 3.
4.
Benefits given to rank-and-file
If the grant of fringe benefits is required by the