CHAPTER 6

FRINGE BENEFITS TAX

Problem 6 – 1 TRUE OR FALSE
1. False – FBT is a final tax of the employee. However, this is the liability of the employer to withhold the final tax of
32%
2. True
3. True
4. True
5. True
6. True
7. True
8. True
9. False – Some housing fringe benefit is not subject to income tax. Ex. Temporary housing for three months or
housing benefit under the employer’s benefit rule.
10. True, also FB is also a form of incentives to rank-in-file employees.
11. False – These are benefits other than salaries and also given to rank-in-file employees.
12. False – Wage and salaries are not subject to reduction once given regardless of the financial condition of the
employer.
13. True
14. True
15. False – The corporate income tax rate is 30% as of 2012, while the fringe benefit tax remains at final tax rate of
32%.
16. True, unless these are among the de minimis

Problem 6 – 2 TRUE OR FALSE

1. False – De minimis are also fringe benefits in small amount but not subject to FBT.
2. False – Fringe benefits given to rank-in-file, except those which are among the de minimis and those given for
employer’s convenience, are not subject to FBT but subject to compensation income tax.
3. True
4. True
5. False – P750/semester is the ceiling for exempt medical allowance
6. False- the exempt meal allowance must be related in the rendering of overtime work to be considered de
minimis.
7. True
8. True
9. True
10. False – A travel required by the company to its officer is not subject to FBT because by its nature a travelling
expense.
11. true
12. False – Scholarship grants to employees not related to business is taxable.
13. False – These are among those exempted from fringe benefit tax.

Problem 6-3 Problem 6-4

1. C 1. C
2. B 2. C
3. C 3. A
4. C 4. D
5. D 5. D
6. A 6. A
7. B 7. B
8. D 8. B
9. A 9. A – only P5,000 is taxable the excess of
P10,000.
10. B 10. D
11. B 11. D
12. D 12. D