Chapter 7

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CHAPTER 7

FRINGE BENEFITS TAX
Problem 6 – 1 WHAT? OR LIE
1. What?
2. Lie – These are benefits other than salaries.
3. Lie – Wage and salaries are not subject to reduction once given regardless of the financial
condition of the employer.
4. What?
5. Lie – This a definition of fringe benefits not of fringe benefit tax.
6. Lie – The corporate income tax rate is 35% while the fringe benefit tax is a final tax rate
of 32%.
7. What?, unless these are deminimis
8. Lie – FBT is a final tax of the employee.
9. What?
10. What?
11. What?
12. What?
13. What?
14. What?
15. What?
16. Lie – 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.
Problem 6 – 2 WHAT? OR LIE
1. What?
2. Lie – If in the name of an officer employee and reimburse or paid by the employer.
3. Lie - Fringe benefit which are necessary for the business and required for the convenience of the employer are not subject to
fringe benefit tax.

4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

What?
Lie – Scholarship grants to employees not related to business is taxable.
Lie – These are among those exempted from fringe benefit tax.
Lie – Fringe benefits of rank-in-file employee, not mentioned in the exemptions, are
subject to income tax on wages but not subject to fringe benefit tax.
Lie – Rank-in-file employees’ fringe benefits are subject to income tax on wages.
What?
What?
Lie – medical allowance of P750 per semester
Lie – Daily meal allowance for overtime
What?

Problem 6 – 3
1. A
7. A
2. B
8. C
3. B
9. C
4. D
10. A
5. D
11. D
6. D
12. D

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