Presented by:

SUSAN D. TUSOY
Asst. Chief, Assessment Division
RR 19-Davao City
1
Legal Basis:
Sec. 33 of the Tax Code
RR 2-98
RR 3-98
RR 8-2000
RR 10-2000
RR 5-2008
RR 5-2011
RMC 20-2011
Imposition of Tax
A final tax of 32% effective Jan. 1, 2000 on the grossed-
up monetary value of fringe benefit furnished or
granted to the employee (except rank and file
employees) by the employer (whether an individual or
a corporation)
Grossed-Up Monetary Value (GMV)
Shall be determined by dividing the monetary value of
the FB by 68% (effective Jan. 1, 2000);

It represents the whole amount of income realized by
the employee which includes the net amount of money
or the net monetary value of the property plus the
amount of tax otherwise due from the employee but
paid by the employer.
Illustration
ABC Co. provides housing allowance to its manager at P6,800
per quarter.

FBT is computed as follows:
GMV = (P6,800 / 68%) = P10,000
FBT = GMV x 32%
= (P10,000 x 32%)
= p3,200.00
Summary
Given to employee - P 6,800
Paid to BIR - 3,200
Fringe Benefit Expense - P10,000



Exception
If the fringe benefits are required by
the nature of or necessary to the
trade, business or profession of the
employer, or when the fringe benefit is
required by the nature of, or necessary
to the trade, business or profession of
the employer or when it is for the
convenience or advantage of the
employer.

Fringe Benefits defined
means any good, service or other benefit
furnished or granted in cash or in kind
by an employer to an individual
employee (except rank and file
employees), such as, but not limited
to the following:

Fringe Benefits

(1)Housing;

(2)Expense Account;

(3)Vehicle of any kind;

(4)Household personnel, such as maid, driver and others

(5)Interest on loan at less than market rate to the extent
of the difference between the market rate and actual
rate granted;

Fringe Benefits (cont..)

(6) Membership fees, dues and other expenses borne by
the employer for the employee in social and athletic /
clubs or other similar organizations;

(7) Expenses for foreign travel;

(8) Holiday and vacation expenses;

(9) Educational assistance to the employee or his
dependents; and

(10) Life or health insurance and other non-life insurance
premiums or similar amounts in excess of what the law
allows.
Fringe Benefits Not Subject to Fringe
Benefits Tax
1. FB which are authorized and exempted from
income tax under the Code or under any special
law
2. Contributions of the employer for the benefit of
the employee to retirement, insurance and
hospitalization benefit plans;
3. Benefits given to the rank and file, whether
granted under a collective bargaining agreement
or not;
Fringe Benefits Not Subject to Fringe
Benefits Tax
4. De minimis benefits

5. If the grant of fringe benefits to the employee is
required by the nature of, or necessary to the
trade, business or profession of the employer; or

6. If the grant of the fringe benefits is for the
convenience of the employer.
DE MINIMIS BENEFITS
(as amended by RR 5-2011)
a) Monetized unused vacation leave credits of employees
not exceeding 10 days during the year

b) Monetized value of vacation and sick leave leave
credits paid to government officials and employees

c) Medical cash allowance to dependents
Not exceeding P750/employee/semester or
P125/month

DE MINIMIS BENEFITS
d) Rice subsidy of P1,500 or 1 sack of 50 kg rice per month
amounting to not more than P 1,500.

e.) Uniform and clothing allowance not exceeding
P4,000/ annum

f.) Actual medical assistance, e.g. medical
allowance to cover medical and healthcare needs,
annual medical/executive check-up, maternity
assistance, and routine consultations, not exceeding
P10,000 per annum (RR 5-2011)
(Previous: Actual yearly medical benefits not exceeding
P10,000/annum).


g) Laundry allowance not exceeding P 300.00/
month
h) Employees achievement awards in the form of
tangible personal property other than cash or gift
certificate with annual value not exceeding
P10,000 under established written plan which
does not discriminate in favor of highly paid
employees;
DE MINIMIS BENEFITS
DE MINIMIS BENEFITS
i.) Gifts given during Christmas and major
anniversary celebrations not exceeding
P5,000/annum/employee

j.) Daily meal allowance for overtime work and
night/graveyard shift not to exceed 25% of the
basic minimum wage on a per region basis (RR 5-2011)
(previous: daily meal allowance for overtime work not exceeding 25% of
the basic minimum wage) .



DE MINIMIS BENEFITS
Deleted provision under RR 5-2011

flowers, fruits, books, or similar items given to employer under special
circumstances, e.g., on account of illness, marriage, birth of a baby, etc.



DE MINIMIS BENEFITS
All other benefits given by employers which are
not included in the above enumeration shall not
be considered as de minimis benefits, and
hence, shall be subject to:

Income tax / WT on Compensation for rank
and file employees and
Fringe benefit tax for supervisory and
managerial positions

DE MINIMIS Rules
DE MINIMIS BENEFITS conforming to the
ceiling shall not be considered in determining the
P 30,000
the excess over the respective ceilings shall be
considered as part of the other benefits and
the employee receiving it will be subject to tax
only on the excess over the P30,000.
Manner of Payment
The tax imposed is payable by the employer
Manual Filing / payment
Due date is on or before the 10th day of the month
following the quarter in which the withholding was
made
EFPS Filing/ePayment
Due date is on or before the fifteenth (15
th
) day of the
month following the quarter in which the withholding
was made
Use BIR FORM 1603

The end