1.

) List down the “De minimis benefits” and discuss how is this presented in the
ITR.

Under RR No. 02-98, as amended by RR Nos. 05-11, 01-15, and 11-18, the
following are considered de minimis benefits for private employees:

 Monetized unused vacation leave credits of private employees not exceeding

10 days during the year;
 Medical cash allowance to dependents of employees, not exceeding P1,500
per employee per semester or P250 per month;
 Rice subsidy of P2,000 or one 50-kg sack of rice per month worth not more
than P2,000;
 Uniforms and clothing allowance not exceeding P6,000 per annum;
 Actual medical assistance not exceeding P10,000 per annum;
 Laundry allowance not exceeding P300 per month;
 Employees’ achievement awards, which must be in the form of tangible
personal property other than cash or gift certificates, with an annual monetary
value not exceeding P10,000 received by the employee under an established
written plan which does not discriminate in favor of highly paid employees;
 Gifts given during Christmas and major anniversary celebrations not
exceeding P5,000 per employee per annum;
 Daily meal allowance for overtime work and night/graveyard shift not
exceeding 25% of the basic minimum wage; and
 Benefits received by an employee by virtue of a Collective Bargaining
Agreement (CBA) and productivity incentive schemes, provided the total
annual monetary value received from both CBA and productivity incentive
schemes combined do not exceed P10,000 per employee per taxable year.

De minimis benefits are monetary incentives that companies in the Philippines

voluntarily provide to rank-and-file and management workers that are not subject
to withholding tax and income tax on compensation income. There is a set
maximum amount that is tax-free per de minimis benefit. For example, the
maximum annual clothing allowance is Php 5,000. If you receive a monthly
clothing allowance of Php 300, the full sum is tax-free. If you are given Php 500 or
more per month for your clothing allowance, the excess of Php 5,000 in a year is
already subject to tax, which means it is included in the taxable income
computation.

2.) How do we solve FRINGE BENEFITS TAX? Discuss briefly

Revenue Regulation (RR) 11-2018 imposed new tax rates for the taxable fringe
benefits. Below is as follow:

 Employee is a citizen/resident alien/non-resident alien engaged in trade or

business within the Philippines - Thirty-five percent (35%)
  Employee is a non-resident alien not engaged in trade or business within the
Philippines - Thirty-five percent (25%)

To determine the grossed-up value/tax base of the fringe benefit, the actual
monetary value or the actual amount of benefit furnished, granted or paid shall be
divided by sixty-five percent (65%) subject to 35% Fringe Benefit Tax (FBT) or the
divisor shall be seventy-five percent (75%) subject to 25% FBT.

3.) What are the other sources of income not discussed in this module which
must be included in the gross income?

References:

De Minimis Benefits of Employees in the Philippines. Duran and Duran-Schulze Law. (2019,
April 22). Retrieved November 16, 2021, from https://www.duranschulze.com/de-minimis-
benefits-of-employees-in-the-philippines/.

Fringe benefits under Philippine Taxation. MPCamaso & Associates. (2020, November 16).
Retrieved November 16, 2021, from https://mpca.com.ph/fringe-benefits-under-philippine-
taxation/.