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# Fringe Benefit Tax - Article I **True or False Questions** 1. Foreign corporations operating in the Philippines are taxable on income derived from sources within and outside the Philippines. 2. Fringe benefits tax is a withholding tax, which is presumably withheld by the employer from superv...

# Fringe Benefit Tax - Article I **True or False Questions** 1. Foreign corporations operating in the Philippines are taxable on income derived from sources within and outside the Philippines. 2. Fringe benefits tax is a withholding tax, which is presumably withheld by the employer from supervisory or managerial employees' fringe benefits. 3. Rank and file employees may be subject to fringe benefit tax. 4. The annual depreciation value of a movable property is 20% of its value. 5. Lodging costs for foreign travel are taxable fringe benefits regardless of the amount. 6. Expenses receipted in the employer's name are considered business expenses of the employer. 7. Domestic and foreign residents can deduct itemized deductions from business income. 8. Returns that show cumulative income and deductions for a quarter don't need to be filed if no income tax is due from operations of the preceding quarters. 9. Income from offshore banking units (authorized by the BSP) from transactions with local banks is subject to a 10% final tax. 10. Non-resident owners, lessors, or distributors of cinematographic films are taxed at 15% of gross income. 11. Perquisite benefits are considered compensation income, but are fringe benefits subject to fringe benefit tax. 12. Dealings in ordinary assets are subject to regular income tax. Dealings in capital assets (excluding domestic stocks and real properties) are also subject to regular income tax. 13. Every corporation must file a quarterly summary declaration of its gross income and deductions on a cumulative basis for the preceding quarter.. 14. Capital assets held by an individual for less than one year (short-term) are subject to 100% capital gains or loss recognition. Capital assets held for longer than one year (long-term) are subject to 50% capital gains or loss recognition. 15. Fringe benefits encompass all benefits given to employees outside of basic pay. 16. Aircraft (including helicopters), used for business, are not subject to fringe benefit tax. 17. Fringe benefits subject to the FBT are those given to managerial or supervisory employees, not rank-and-file employees. 18. Compensation income technically applies to the types of employee benefits that are subject to regular tax. Managerial and supervisory employee fringe benefits are not considered compensation income, but are subject to final tax.