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True or False

The document contains 15 true/false statements regarding fringe benefits and fringe benefit tax in the Philippines. It addresses topics like what qualifies as a fringe benefit, who is liable for fringe benefit tax, how to calculate grossed-up monetary value, and definitions of managerial employees. The true/false questions test understanding of these concepts related to fringe benefits and fringe benefit tax.

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Jonalene Calara
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184 views2 pages

True or False

The document contains 15 true/false statements regarding fringe benefits and fringe benefit tax in the Philippines. It addresses topics like what qualifies as a fringe benefit, who is liable for fringe benefit tax, how to calculate grossed-up monetary value, and definitions of managerial employees. The true/false questions test understanding of these concepts related to fringe benefits and fringe benefit tax.

Uploaded by

Jonalene Calara
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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TRUE OR FALSE

Write True if the statement is correct, otherwise write False.

1. A fringe benefit is any goods, service or other benefits furnished or granted by an


employer in cash or in kind, including basic salaries to individual employees.
2. A fringed benefit which is subject to the fringe benefit tax is taxable income of the
employee.
3. Fringe benefit which is not subject to the fringe benefit tax is taxable income to the
employee.
4. Fringe benefits subjects to fringe benefit tax cover only those fringe benefits given or
furnished to a managerial or supervisory employee.
5. Fringe benefit tax shall be treated as a final income tax on the employee withheld and
paid by the employer on a quarterly basis.
6. The grossed-up monetary value of the fringe benefit is the actual amount received by
the employee.
7. The grossed-up monetary value of the fringe benefit shall be determined by dividing the
monetary value of fringe benefit by the grossed up monetary value factor.
8. The person liable for fringe benefit tax is the employer, whether he is an individual,
professional partnership or a corporation regardless of whether the corporation is
taxable or not or the government and its instrumentalities.
9. A managerial employee is one who is vested with powers of prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees, or to effectively recommend such managerial
actions.
10. The grant of fringe benefits to the employee is exempt from tax if such grant is required
by the nature of, or necessary to the trade, business or profession of the employer.
11. The amount on which the fringe benefit tax rate is applied is the monetary value of the
fringe benefit.
12. The amount on which the fringe benefit tax rate is applied is the amount deductible by
the employer from its gross income.
13. Grossed-up monetary value is reflected in the books of accounts as fringe benefit
expense and fringe benefit tax expense.
14. Failure to withhold the required tax on salary is collectible from the employer.
15. Failure to withhold the correct amount due to false information supplied by the
employee shall be the liability of the employee.
51. Pedro, single is a minimum wage earner of EDT Manufacturing Corporation. In addition to
his basic minimum wage of P144,000 for 2020 he I also received the following benefits:
 De minimis, P60,000 (P20,000 over the ceiling)
 13th month pay and other benefits, P122,000

Pedro’s income tax due should be:

a. P20,000 c. P52,000
b. P32,000 d. P0

52. Pedro senior citizen, is a minimum wage earner of EDT Manufacturing Corporation. Pedro is
also engaged in trading various consumer products every weekend. He derived profit therefrom
amounting to P500,000 for 2020 taxable year. In addition to his basic minimum wage of
P114,000 for 2020 taxable year, he likewise received the following additional benefits from his
employer:

 De minimis, P40,000 (all wiithin the ceiling)


 13th month pay and other benefits, P35,000

Pedro’s taxable income should be:

a. P644,000 c. P500,000
b. P594,000 d. P350,000

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