Summary Of Fb.docx

SPECIAL TREATMENT OF FRINGE BENEFITS Fringe Benefit

Monetary Value

Money Property with ownership transferred

Amount granted FMV of the property

Property without transfer of ownership

Depreciation value of the property

Housing privilege

Monetary value

Motor vehicle

Residential property leased by employer/ employee for the use of employee Residential property owned by employer and assigned to employee Residential property purchased by employer on installment basis for use of his employee Residential property purchased by employer and ownership transferred to employee Residential property transferred to employee at less than employer’s acquisition cost Housing privilege of military officials

50% of the value of the amount of rental paid by employer

Housing unit adjacent to business or factory Temporary housing for employee

Within max. of 50 Use of aircraft owned meters: not taxable FB by the employer Stays for 3 mos. or Use of yacht less: not taxable FB

Monetary value

Motor vehicle purchased by employer in the name of employee* Cash for the purchase provided by employer*

Acquisition cost or entire value of the benefit

50% x (5% of acquisition cost exclusive of interest)

Purchase on installment basis by employer in name of employee*

(Acquisition cost exclusive of interest)/5 years

Entire value of the benefit

Portion of the purchase price shouldered by the employer; ownership in the name of employee Fleet of vehicles owned and maintained by employer for use of the business Fleet of motor vehicles leased by employer

Entire value of the benefit

50% x (5% of FMV or Zonal value whichever is higher)

(FMV or Zonal value, whichever is higher) less cost to employee

Phil. Army, Navy and Air Force: not taxable FB

Cash received by the employee

(Acquisition cost of vehicles not normally used for sales etc.)/5 years x 50% (Amount of rental payments for vehicles not normally used in sales etc.) x 50% Not subject to FBT

Depreciation of yacht based on EUL of 20 years *regardless of whether the benefit is used by the employee partly for his personal purpose and partly for the benefit of the employer

Guidelines to remember the monetary value: 1. Is there a transfer of ownership?

SPECIAL TREATMENT OF FRINGE BENEFITS a. Yes: MV= Full value of benefit b. No: MV= 50% x Annual Benefit 2. Is the property owned by the employer? For housing: a. Yes: Annual Benefit= 5% of FMV or Zonal Value, whichever is higher; OR 5% of acquisition cost exclusive of interest in case of installment b. No: Annual Benefit= Annual rentals, if leased; Full value if transferred to employee For motor vehicles: c. Yes: Annual Benefit= Acquisition cost of vehicles not normally used for sale etc. /5 years d. No: Annual Benefit= Annual rentals, if leased; Full value if transferred to employee, except installment (divided by 5 years to get the annual benefit) Requirements for expenses to be exempted from FBT: 1. Expenditures are duly receipted for 2. Issued in the name of the employer 3. Not a personal expense of the employee De minimis benefits  

13th month and other benefits threshold: P90,000 De minimis benefits: a) Monetized VL credits given to private employees up to 10 days b) Monetized VL/SL credits given to government employees c) Medical allowance to dependents: P1,500 (OLD LAW: 750) per semester or P250 (OLD LAW: 125) per month d) Rice subsidy: P2,000 per month (OLD LAW: 1,500) (1 sack of rice 50 kg) e) Uniform and clothing allowance: P6,000 per year (OLD LAW: 5,000) f) Actual medical allowance: P10,000 per year (liquidated by invoices/ or in the name of employee) g) Laundry allowance: P300 per month h) Employee achievement awards: P10,000 per year (in kind) i) Gifts during Christmas and other anniversaries: P5,000 per year j) Daily meal allowance for overnight work and graveyard shift (25% of minimum wage) k) Productivity incentive and benefits, CBA: P10,000 per year**

**If the total productivity incentive is in excess of the threshold (e.g. P12,000), the whole amount (P12,000) shall be included in the other benefits subject to P90,000 threshold.