Taxation, 2019 Bar — Question B.13

QUESTION

As a way to augment the income of the employees of DEF, Inc., a private corporation, the management decided to grant a special stipend of P50,000.00 for the first vacation leave that any employee takes during a given calendar year. In addition, the senior engineers were also given housing inside the factory compound for the purpose of ensuring that there are available engineers within the premises every time there is a breakdown in the factory machineries and equipment. (a) Is the special stipend part of the taxable income of the employees receiving the same? If so, what tax is applicable and what is the tax rate? Explain. (3%) (b) Is the cash equivalent value of the housing facilities received by the senior engineers subject to fringe benefits tax? Explain. (3%)

You can write freely without an account. Sign in to reveal the suggested answer and track your progress.