f No It is subject to basic tax instead of FBT P33 P957000 computed as follows

F no it is subject to basic tax instead of fbt p33

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f)No. It is subject to basic tax instead of FBT. P3.3 P957,000 computed as follows:Compensation income P900,000 Monthly transportation allowance** 36,000 De Minimis Benefits Other Benefits 13thmonth pay - P75,000 Christmas bonus (P5,000 is de minimis) P5,000 - Christmas bonus (P5,000 de minimis under RR 1-2015) 5,000 20,000 Productivity incentive pay (de minimis under RR 1-2015) 10,000 - Uniform allowance (15,000-5,000) 5,000 10,000 Medical allowance (entire amount is de minimis) 10,000 - Rice subsidy [24,000-(1,500 x 12)] 18,000 6,000 Total (known as 13thMonth Pay & Other Benefits) 111,000 Tax Exempt 13thMonth Pay & Other Benefits; TRAIN Law (90,000) 21,000 Taxable income P957,000 **Fixed Allowances received regularly shall be treated as part of basic compensation income Productivity incentive pay not exceeding P10,000 shall be exempt de minimis Christmas Gift/Bonus = 1stP5,000 shall be exempt de minimis
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10 |P a g eS o l u t i o n s M a n u a l -I n c o m e T a x a t i o n ( 2 0 1 8 E d i t i o n )b y T a b a g & G a r c i aP3.4P540,000 computed as follows:Compensation income P540,000 De Minimis Benefits Taxable Benefits 13thmonth pay and mid-year bonus P67,500 Christmas gift P5,000 5,000 Uniform allowance (7,500-5,000) 5,000 2,500 Actual Medical allowance (P15,000-10,000) 10,000 5,000 Medical allowance to dependents (P2,000-1,500) 1,500 500 Rice subsidy [entire amount is de minimis] 18,000 - Monetized vacation leave [24,000-(2,000x 10)] 20,000 4,000 Total 13thMonth Pay & Other Benefits84,500 Tax Exempt 13thMonth Pay & Other Benefits; TRAIN Law90,000 - Taxable income P540,000 P3.51.a)P165,000 x 50% = P82,500 b)P82,500/65% x 35% = P44,423 2.a.P4.5M x 5% /4 x 50% = P28,125 b.P28,125/65% x 35% = P15,144 3.a.P4.5M b.P4.5M/65% x 35% = P2,423,077 4. a.P1,200,000 b.P1,200,000/65% x 35% = P646,154 5. a.P800,000 b.P800,000/65% x 35% = P430,769 6. a.P1,200,000/5 = P240,000 b.P240,000/65% x 35% = P129,230 TRUE OR FALSE 1. FALSE 6. FALSE 11. FALSE 2. FALSE 7. TRUE 12. TRUE 3. TRUE 8. TRUE 13. TRUE 4. TRUE 9. TRUE 14. TRUE 5. TRUE 10. TRUE 15. TRUE MODIFIED IDENTIFICATION 1. B 6. B 11. A 16. A 2. B 7. B 12. A 17. B 3. A 8. B 13. B 18. B 4. B 9. B 14. A 19. B 5. B 10. B 15. B 20. B MULTIPLE CHOICE1. C 11. C 21. D 31. D 41. D 2. A 12. A 22. A 32. B 42. C 3. D 13. A 23. D 33. A 43. D 4. D 14. B 24. C 34. D 44. D 5. D 15. B 25. D 35. A 45. A 6. D 16. D 26. A 36. C 46. A 7. B 17. C 27. D 37. C 47. A 8. A 18. B 28. B 38. D 48. B 9. D 19. C 29. D 39. B 49. D 10. C 20. D 30. B 40. D 50. A 51. D 52. D 53. C Supporting Computations (Multiple Choice): (* #13) The journal entry in letter “a” is the journal entry provided in related revenue regulations. Nonetheless, the authors believe that the journal entry should have been: Compensation expense (@ GUMV) Pxx Cash Pxx Consequently, from the journal entry shown above, the account debited as “fringe benefit tax expense” in revenue regulations should not form part of the employer’s “Taxes Expense” but as a component of the employer’s “Compensation expense”. #22. P97,500/65% = P150,000(23) To managerial – fringe benefit expense P1,300,000 Fringe benefit tax expense (P1.3M/68% x 35%) 700,000 Rank and File 5,000,000 Total P7,000,000 (24) Expenditure attributable to Managerial employees (P1.2M x 20%) P240,000 Divide by GUMVF 65% Grossed-up monetary value P369,231 x FBT rate 35% Fringe Benefit Tax P129,231
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11 |P a g eS o l u t i o n s M a n u a l -I n c o m e T a x a t i o n ( 2 0 1 8 E d i t i o n )b y T a b a g & G a r c i a(25) Total deductible expense = P1,200,000 + 129,231 = P1,329,231 (26) Salaries and wages gross of CWT P816,000 Fixed monthly allowance** 60,000 Total compensation income subject to graduated rate P876,000
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