Toazinfo-cpar-fringe-benefit-tax-pr 359bc3ace9b24a0bbaa95405437262 c9 PDF

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FRINGE BENEFITS TAX The following concepts denote exemption from the fringe benefits tax, except a. convenience of the employer b. necessity to the business or trade c. welfare and benefits of the employee d. de minimis benefits With regard to the amount on which the fringe benefit tax rate is appli...

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FRINGE BENEFITS TAX 1. The following concepts denote exemption from the fringe benefits tax, except a. convenience of the employer b. necessity to the business or trade c. welfare and benefits of the employee d. de minimis benefits 2. With regard to the amount on which the fringe benefit tax rate is applied, which statement is wrong? The tax benefit rate is applied on a. The monetary value of the fringe benefit b. The gross-up monetary value of the fringe benefit c. The amount deductible by the employer from gross income d. Both accounts of the fringe benefit and the fringe benefit tax 3. The following fringe benefits are not subject to fringe benefit tax, except a. if required by the nature of or necessary to the trade, business or profession of the employer b. contributions of the employer for the benefit of the employee to retirement, insurance and hospitalization benefits plans c. benefits given to the rank and file employees. d. if given for the convenience or advantage of the employee 4. Basic rules on fringe benefits tax, except a. Fringe benefits given to the rank and file employees are not subject to fringe benefits tax b. Fringe benefits given to a supervisory or managerial employee are subject to fringe benefits tax c. De minimis benefits whether given to rank and file employee or to supervisory or managerial employee are not subject to fringe benefit tax d. The fringe benefit tax is a tax imposed on the managerial or supervisory employee 5. As a rule, fringe benefit furnished or granted in cash or in kind by an employer to an individual employee maybe subject to the fringe benefit tax, if given to A. Rank and file employees B. Managerial employees C. Those holding supervisory positions a. Only A and B 6. The fringe benefit tax is A. Imposed on the employer a. Only A and B

b. Only A and C

c. Only B and C

d. A, B and C

B. Withheld at source

C. Deductible expense by the employee

b. Only A and C

c. Only B and C

d. A, B and C

7. Which of the following is subject to fringe benefit tax? a. compensation income of the rank and file employees b. fringe benefit of the rank and file employees c. compensation income of the managerial employees d. fringe benefit of the managerial employees 8. Which of the following statements is correct? a. Fringe benefits given to employees is subject to fringe benefits tax b. Fringe benefits given to employees is exempt from fringe benefits tax c. If the fringe benefits is taxable, the tax will be paid by the employer d. Fringe benefits maybe given to managerial, supervisory and rank and file employees

9. Daily meal allowance for overtime work is a de minimis if not exceeding what percent of the basic minimum wage? d. 25% a. 10% b. 15% c. 20% 10. Facilities or privileges furnished or offered by an employer to his employees that are of relatively small value and are offered or furnished by the employer merely as a means of promoting the health, goodwill, contentment, or efficiency of his employees. c. de minimis d. grossed-up monetary a. fringe benefit b. fringe benefit tax 11. the following fringe benefits are not subject to fringe benefits tax, except: a. Fringe benefits given to the rank and file employees, whether granted under a collective bargaining agreement or not b. Contributions of the employer for the benefit of the employees to retirement, insurance and hospitalization benefits plan c. De minimis benefits, as defined in the rules and regulations to be promulgated by the Secretary of Finance, upon recommendation of the Commissioner. d. Fringe benefits furnished or granted by the employer to its managerial and supervisory employees. 12. Which statement is wrong? The fringe benefits tax is a. imposed on the employer b. imposed on the rank and file employee if the amount of the benefit exceeds the ceiling allowed by the tax code c. withheld at source d. deductible by the employer 13. A Corporation gave the following cash benefits to a rank and file employee in 2011: Uniform allowance Rice subsidy Monetized unused leave credits (12 days) Safety achievement award Medical allowance to dependents of the employee Medical benefits 13th month pay Christmas bonus

P

5,000 21,000 9,000 10,000 2,000 12,000 16,000 16,000

The fringe benefits that shall be considered as part taxable income is a. P 10,000 b. P 20,000 c. P 18,000 d. P 8,000 14. In 2012, A Corporation allows its Sales Manager to incur expenses subject to reimbursement, as follows: Electricity (Meralco) – 70% in the name of A Corporation P 20,000 Water (Maynilad) -70% in the name of A Corporation 2,000 Grocery (SM) 10,000 Gasoline of Company car 12,000 Representation and Transportation 4,000 The amount subject to fringe benefits tax is a. P48,000 b. P25,400 c. P15,400 d. P16,600 15. The grossed-up monetary value of fringe benefit subject to fringe benefit tax received by a non-resident alien individual not engaged in trade or business in the Philippines is computed by dividing the monetary value of the fringe benefit by a. 75% b. 25% c. 85% d. 15%

***16-17 As a means of promoting the health , goodwill, and efficiency of his employees, employer A gave rank and file employee B the following fringe benefits in 2012: a. b. c. d.

Monetized unused leave credits of 15 days Rice Subsidy Uniform and clothing allowance Achievement award for length of service in the form of tangible property e. Gifts given during Christmas and major anniversary celebrations f. 13th month pay 16. The amount of taxable fringe benefits is a. P30,000 b. P10,000

P

9,000 24,000 8,000 15,000 10,000 18,000

c. P23,000

d. P11,000

17. The employer’s deductions for the benefits given a. P23,000 b. P18,000 c. P66,000

d. P84,000

18. The following data belong to A Corp. for the year 2010 a. Educational assistance to supervisors and their children b. Employer’s contribution for the benefit of the employees to retirement, insurance and hospitalization benefit plans c. Year’s rental for an apartment paid by the Co. for the use of its comptroller The fringe benefits tax due is

P

100,000 80,000 120,000

a. P75,294 b. P103,529 c. P141,176 d. P112,941 19. A Corp., a regional operating headquarters of a multinational Corp. established in the Phils. Provided its employees cash and non-cash fringe benefits in 2010 as follow: Total amount of fringe benefits P1,000,000 60% of said amount was given to rank and file employees 40% of said amount was given to corporate officers as follow: a. to resident citizens 45% b. to non-resident aliens not engaged in business in the Phils. 35% c. to special aliens and Filipino employees 20% The fringe benefits tax due is a. P145,489

b. P188,235

c. P84,706

d. P60,704

20. A Co., paid a monthly salary of P100,000 and the monthly rental of P68,000 for a condominium unit for the General Manager. Determine the monthly fringe benefit tax payable (16,000) 21. B Co., owns a condominium unit which is being used by the President of the corp.. It has a fair market value per Real Property Tax Declaration of P2,100,000 and a zonal value of P3,000,000. Determine the monthly fringe benefit tax due (8,824) 22. Mr. A is a mining engineer employed by B. Co., a mining firm. The Co.’s mine is in Minndanao. Mr. A was provided by the Co. with living quarters at the mine site. The fair rental value of the living quarters is P15,000 a month. Determine the monthly fringe benefit tax due (0)

23. In addition to other fringe benefits, Mr. B, a Chief Accountant, availed of the car plan of his employer, C Co., Under the plan, Mr. B shouldered only fifty percent (50%) of the cost of the car. Mr. B paid P340,000 for the car. The car was registered in the name of Mr. B. the Co. paid another P340,000. Determine: a. The fringe benefit tax due (160,000) b. The deductible expense of the employer. (500,000) 24. In 2010, A company purchased a second hand car for its Chief Accountant as a fringe benefits. The cash purchases price of the car is P120,000, but the company paid P30,000 as down payment plus four equal annual instalment of P30,000 (P120,000 plus P30,000 interest). The ownership was transferred to the chief accountant. Determine the monthly fringe benefit tax due (2,824) 25. In 2010, A, the sales manager, purchased a brand new car amounting to P500,000 of which P200,000 was contributed by the company as his fringe benefit. Determine the monthly fringe benefit tax due (94,118) 26. In 2010, ABC Corp. hired Miss A as sales manager for cosmetics. She was given the following compensation and fringe benefit: Salary P 200,000/month Three maids 4,000 per maid/month Personal driver 8,000/ month Home owner’s Association dues 1,200/year Determine the monthly fringe benefit tax due (28,376) 27. In 2012, A, the owner of Victory Supermarket lends P100,000 to B, the supermarket manager. It is stipulated in their agreement that the amount should be paid in one year with an annual interest of 3%. Determine the monthly fringe benefit tax due (4235/4=1059) 28. In 2012, Mr. A the Vice President for finance of X Corp. incurred the following expenses by attending a three-day foreign business convention: Plane tickets (USA travel) First class Economy Hotel accommodation (USA) Inland travel Assume $1.00 = P50 Determine the monthly fringe benefit tax due assuming that the business convention was: a. With documentary evidence (49,412) b. Without documentary evidence (112,941)

$ 1,000 500 2,700 600

29. During the taxable year 2010, A Corp. assigned its own residential building as a residential building as a residential house of its Marketing Manager. The FMV of the said property as determined by the CIR and the fair market value of its current Real Property Tax declaration amounts to P9,000,000 & P10,000,000, respectively. Determine the monthly fringe benefit tax due for the month of January. (9,804) 30. In 2010 ABC Corporation paid for the annual rental of a residential house used by its general manager amounting to P136,000. The entry to record the benefits is a. Fringe Benefit Expense Fringe Benefit Tax Expense Cash b. Fringe Benefit Expense Fringe Benefit Tax Expense

P 136,000 64,000 P 200,000 P 136,000 32,000

Cash c. Fringe Benefit Expense Fringe Benefit Tax Expense Cash d. Fringe Benefit Expense Fringe Benefit Tax Expense Cash

P 200,000 P 68,000 32,000 P 168,000 P 68,000 64,000 P 132,000

31. Identify whether or not the following are subject to fringe benefits tax: a. Fringe benefit required by the nature of or necessary to trade, business of the employer b. Fringe benefit for the convenience or advantage of the employer c. Fringe benefit given to rank and file employees d. Housing privilege of the AFP e. Housing units situated inside or adjacent to business or factory (located within 30 meters from the perimeter of the business) f. Temporary housing for an employee who stays in the housing unit for 3 months or less g. Representation and entertainment allowances which are fixed in amount and regularly received by employee h. Use by employee of aircraft (including helicopters) owned and maintained by the employer i. Cost of economy and business class airplane ticket for foreign travel j. De minimis benefits k. Educational assistance granted to employees’ dependents through competitive scheme under scholarship program of the company l. Cost of premiums borne by the employer for the group insurance of his employees m. Contributions of employer for the benefit of the employee under SSS and GSIS laws n. Contributions of the employer for the benefit of the employees to retirement, insurance and hospitalization benefit plam....