Fringe benefit tax (FBT) is a final withholding tax on the grossed-up monetary value of the fringe benefit granted

by the
employer toan employee who holds a managerial or supervisory position (i.e., except rank and file employees). FBT is treated as
a final incometax on the employee which shall be withheld and paid by the employer on a calendar quarterly basis.

What is the BIR Form used to file Fringe Benefit Tax?

BIR Form No. 1603 – Quarterly Remittance Return of Final Income Taxes Withheld on Fringe Benefits Paid to Employees
Other than Rank and File.

Who Are Required To File?

Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on fringe
benefits furnished to employees other than rank and file employees subject to Final Withholding Tax

What are the procedures in filing BIR Form 1603?

1. Read instructions indicated in the tax return.2. Accomplish BIR Form 1603 in triplicate copies.3. If there is tax required to be
remitted:

Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office where you are registered or taxpayer
concerned is registered and present the duly accomplished BIR Form No. 1603, together with the required attachments and
your payment.

In places where there are no AAB, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer
located within the Revenue District Office where you are registered or taxpayer concerned is registered and present the duly
accomplished BIR Form No. 1603,together with the required attachments and your payment.

Receive your copy of the duly stamped and validated form from the teller of the AAB’s/Revenue Collection Officer/duly
Authorized City or Municipal Treasurer.

4. If there is no tax required to be remitted:

Proceed to the Revenue District Office where you are registered or taxpayer concerned is registered and present the duly
accomplished BIR Form No. 1603, together with the required attachments.

Receive your copy of the duly stamped and validated form from the RDO representative

Deadline

Filing and Payment Via EFPSOn or before the fifteenth (15th) day of the month following the end of the calendar quarter in
which the fringe benefits were granted to the recipient.

Manual Filing and Payment

On or before the tenth (10th) day of the month following the end of the calendar quarter in which the fringe benefits were
granted tothe recipient.

Reference and further codal readings: R.A. 8424 (as amended), BIR RR 2 and 3-98 (as amended), BIR RR 5-2011 (as
amended),RMC 20-2011, BIR Form 1603 guidelines and tax rates, Bureau of Internal Revenue Philippines (www.bir.gov.ph)

Moreover, these regulations do not cover those benefits properly forming part of compensation income subject to withholding
tax on compensation in accordance with Revenue Regulations No. 2-98.

Fringe benefits which have been paid prior to January 1, 1998 shall not be covered by these Regulations.

Determination of the Amount Subject to the Fringe Benefit Tax — In general, the computation of the fringe benefits tax would
entail (a) valuation of the benefit granted and (b) determination of the proportion or percentage of the benefit which is subject
to the fringe benefit tax. That the Tax Code allows for the cases where only a portion (i.e. less than 100 per cent) of the fringe
benefit is subject to the fringe benefit tax is clearly stated in Section 33 (a) of R.A. 8424 which stipulates that fringe benefits
which are "required by the nature of, or necessary to the trade, business or profession of the employer, or when the fringe
benefit is for the convenience or advantage of the employer" are not subject to the fringe benefit tax. Thus, in cases where the
fringe benefits entail joint benefits to the employer and employee, the portion which shall be subject to the fringe benefits tax
and the guidelines for the valuation of fringe benefits are defined under these rules and regulations.