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Other fringe benefits not considered as “de minimis” subject to FBT

Other fringe benefits not considered as “de minimis” subject to FBT

Other fringe benefits granted to managerial and supervisory employees which are not included in the enumeration of benefits considered as “de minimis benefits”, and not among those specifically exempted from FBT under RR 03-98, as last amended by RR 05-2011, should be subject to fringe benefit tax, not to income tax/ withholding tax on compensation income.

In RR 05-2011, the BIR made a statement that “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 as well as withholding tax on compensation”.
 
Under RMC 20-2011, the BIR clarified that the term “income tax and withholding tax on compensation income” in that paragraph refer to the fringe benefits tax (FBT).  Hence, employers who provide such other fringe benefits to their managerial and supervisory employees should subject the same benefits to FBT by filing  BIR Form 1603 (Quarterly Remittance Return of Final Income Taxes Withheld on Fringe Benefits Paid), instead of BIR Form 1601-C.

For a copy of RMC 20-2011, please access the link below.