Você está na página 1de 5

TAXATION 1 A.Y. 2014 - PART 3 (based on the syllabus and discussion of Atty.

By: RLB | DHB | TLD | RRM 1
  2012     2013   2014   BUT:   2014  
a) Resident  citizen    
→ Citizen    
Arrival:   Dec   May  
Article  4.  Section  1.  The  following  are  citizens  of  the  Philippines:   Jul Dec     31  
Jul  31   31  
1) Those  who  are  citizens  of  the  Philippines  at  the  time  of  the  adoption   y  2   31    
of  this  Constitution;    
2) Those  whose  fathers  or  mothers  are  citizens  of  the  Philippines;    
3) Those   born   before   January   17,   1973,   of   Filipino   mothers,   who   elect   Stayed  Abroad     If  whole  period,   Arrived  on  Jul  31   BUT  if  arrived  on  May  31  
Philippine  citizenship  upon  reaching  the  age  of  majority;  and   from  July  2-­‐  Dec     he  was  abroad,   and  stayed  here   and  stayed  until  Dec  31;  
4) Those  who  are  naturalized  in  accordance  with  law.   31:     then  NRC.  So   til  Dec  31:  since   letter  D  applies.    
  Stayed  outside     taxable  income   less  than  183   NRC  from  Jan  1-­‐May30  
→ Resident   for  182  days  only     will  be  those   days  ka  dire  sa   RC  from  May  31-­‐Dec  31.  
- most   of   the   time   for   the   calendar   year,   you   are   residing   here   in   the   thus  considered     derived  within.   Phil.,NRC  ka.   —HYBRID  
RC  so  taxable   Letter  D  will  not   PERSONALITY—  
within  and   apply  
b) Non-­‐resident  citizen  [section22(E),  NIRC]    
i. a   citizen   of   the   Philippines   who   establishes   to   the   satisfaction   of   the  
commissioner   the   fact   of   his   physical   presence   abroad   with   a   definite    
intention  to  reside  therein   *Nota  Bene  
→ to  the  satisfaction  of  the  commissioner:  you  have  to  inform  the  BIR   - The  measure  of  183  days  or  more  is  made  applicable  to  both  letters  C  and  D.  
that  you  are  no  longer  residing  in  the  Philippines,  otherwise,  your   - Presumption  in  letters  C  and  D  is  that  the  citizen  resides  abroad  temporarily.  
income  within  will  be  taxable.   - The  ‘183  days’  can  either  be  continuous  and  aggregate.  
ii. a  citizen  of  the  Philippines  who  leaves  the  Philippines  during  taxable  year   *Rationale  of  letter  D:  
to   reside   abroad,   either   as   an   immigrant   or   for   employment   on   a   - If  there  is  no  Letter  D  class,  presumption  is,  for  that  year  (2014)  he  is  a  resident  citizen  for  
permanent  basis   having  stayed  in  the  Philippines  more  than  183  days.  Thus  income  within  and  without,  is  
→ self-­‐explanatory   kay   permanent   basis;   return   to   the   Philippines   will   taxable.  BUT  since  we  have  letter  D,  income  within  the  Philippines  for  January  1  to  May  
probably  for  vacation  purposes  nalang.   30  2014  (refer  above)  will  be  taxable  because  he  is  deemed  NRC.    
iii. a  citizen  of  the  Philippines  who  works  and  derives  income  from  abroad  and   v. the  taxpayer  shall  submit  proof  to  the  commissioner  to  show  his  intention  
whose   employment   thereat   requires   him   to   be   physically   present   abroad   of  leaving  the  Philippines  to  reside  permanently  abroad  or  to  return  to  and  
most  of  the  time  during  the  taxable  year   reside  in  the  Philippines  as  the  case  may  be  for  purpose  of  this  section.  
→ most  of  the  time:  Under  a  BIR  Regulation,  it  means  that  that  particular   → Implementation  is  difficult  unlike  corporations  which  submit  records  
citizen  stays  abroad  for  183  days  or  more  (not  more  than  183  days)   to  SEC.  
during  a  calendar  year.    
  NOTE:   a   Filipino   employed   as   Philippine   embassy/consulate   service  
iv. a   citizen   who   has   been   previously   condisered   as   a   non-­‐resident   citizen   and   personnel   o   f   the   Philippine   embassy/consulate   is   not   treated   as   a   non-­‐
who   arrives   in   the   Philippines   at   any   time   during   the   year   to   reside   resident  citizen,  hence  his  income  is  taxable.  
permanently   in   the   Philippines   will   likewise   be   treated   as   a   non-­‐resident   → Overseas   Contract   Worker   or   Seafarer/Seamen:   not   considered  
citizen   during   the   taxable   year   in   which   he   arrives   in   the   Philippines   with   permanent  employees  rather—contractual.  
respect   to   his   income   dereived   from   sources   abroad   until   the   date   of   his    
arrival  in  the  Philippines   c) resident  alien  
→ previously  considered  as  a  non-­‐resident  citizen:     → A  person  not  a  citizen  of  Philippines  by  resides  in  the  Philippines  
→ HYBRID  PERSONALITY  OR  DUAL  PERSONALITY  OF  A  TAX  PAYER   → The  test  use  to  know  if  resident  alien  or  not  is  not  the  length  of  time  he  stays  
  here   but   the   fact   of   whether   he   is   a   mere   transient   or   has   a   definite  
  purpose/intention  of  staying  here  in  the  Philippines.  If  with  definite  purpose  of  
  staying  here,  resident  alien.  
  → One  example:  kind  of  visa  applied  for  
TAXATION 1 A.Y. 2014 - PART 3 (based on the syllabus and discussion of Atty. Aranas)
By: RLB | DHB | TLD | RRM 2
d) non-­‐resident  alien   • If   you   are   an   officer   of   a   Multinational   corporation,   you   are   subject   to   a  
1. NRA-­‐Engaged  in  Trade  or  Business   special  tax  rate  of  15%  only.  IS  this  correct?  NO.  Must  qualify-­‐-­‐officer  of  a  
a. Most  of  the  time,  he  has  a  transaction  here  in  the  Philippines.     RAHQ  or  ROHQ  of  a  multinational  corporation.  
b. TEST:  stayed  here  for  more  than  180  days.      
c. So,  if  non-­‐resident  alien  stays  here  for  more  than  180  days  for  no  definite     On  the  gross  income  in  the  Philippines  of  aliens  employed  by  regional  
purpose,  like  vacation  lang  si  manong,  then  NRA-­‐ETB.     headquarters   15%   (RHQ)   or   area   headquarters   and   regional   operating  
    headquarters   (ROH),   offshore   banking   units(OBUs),   petroleum   service  
2. NRA-­‐Not  Engaged  in  Trade  or  Business     contractor  and  subcontractor  
-­‐ Not   much   of   a   difference   between   a   Resident   Alien   and   a   Non-­‐resident      
Alien  engaged  in  trade  or  business  -­‐-­‐because  they  are  both  taxable  only  for    
income  earned  within  the  Philippines.  The  difference  would  matter  when   f) Estate  and  T  rusts  
it  comes  to  personal  and  additional  exemptions.     → Taxable  as  individuals  on  the  INCOME  of  the  estate  and  of  a  trust.  
-­‐ 180  days  or  more  –  either  continuous  or  aggregate   → Example:  
  On  December  31,  2014,  G  died  and  left  certain  properties  behind–  for  the  
e) special  employees   entire   year   of   2014   G   is   considered   as   an   individual   taxpayer,   resident  
- called  as  such  because  they  are  subjected  to  a  different  rate,  special  rate  of  15   citizen   (classification).   During   the   time/period   of   transferring   the  
%;  and   properties   to   the   heirs,   the   law   gives   persona/personality   to   the   estate  
- Employed  by  special  corporations  (list  is  exclusive)   and/or   trust.   The   estate   is   treated   as   an   individual   prior   to   the   distribution  
i. Regional  headquarters  (RAHQ)  of  multination  corporations,  defined  in  sec.   to   the   heirs   of   the   estate.   Being   treated   as   an   individual,   if   it   earns   an  
22   income   or   a   fruit   then   it   will   be   subjected   to   income   tax.   But   the   estate  
-­‐ No  operations  in  the  Philippines,  does  not  earn  any  income   itself  is  subjected  to  estate  tax.  
-­‐ Only  for  supervision,  to  oversee   → Can  avail  of  the  personal  exemption  of  P20,000  but  not  additional  exemptions.  
ii. Regional   operating   headquarters   (ROHQ)   of   multinational   corporations,   → Why  does  it  remained  at  P20,000?    
defined  in  sec.  22   -­‐ Before   the   tax   code   was   amended,   individuals   can   avail   personal  
-­‐ Has  operations  in  the  Philippines;  earns  an  income  in  the  Philippines   exemption   of   P20,000(single),   P25,000(head   of   the   family),  
iii. Offshore  banking  units   P32,000(married).   The   estate   being   treated   as   a   single   individual   is   given   a  
iv. Petroleum  service  contractors   personal  exemption  at  P20,000.  But  when  RA  9504  is  passed,  this  portion  
  tackling   about   estates   and   trusts   was   not   amended   so   being   a   tax  
• Are   all   Filipinos   employed   by   these   Special   Corporations   are   considered   exemption-­‐-­‐   it   is   strictly   construed   against   the   taxpayer   and   liberally   in  
special  employees?   favor  of  the  government.  Therefore  it  remained  at  P20,000.  
-­‐ GR:   employed   Alien   individual   (EXPATS),   occupying   managerial,   → Who  will  report  the  income?    
technical   and   supervisory   positions;   considered   as   Special   employee   -­‐ Executor  or  administrator  will  have  to  file  the  return.  
therefore,  subjected  to  15%.    
-­‐ EXC:  employed  Filipino,  2  conditions  must  concur:   II. INCOME  TAX  RATES  
1. Occupying  managerial  AND  technical  positions.    
2. No   other   alien   can   occupy   such   position   (other   than   the     For  individuals  Earning  Purely  Compensation  Income  and  Individuals  Engaged  in  Business  
Filipino)   and  practice  of  profession  
• Why  are  they  termed/called  Special  Corporations?   Amount  of  net  taxable   RATE  
-­‐ They  are  registered  here  in  the  Philippines  but  they  are  subjected  to   income  
different  requirements  than  the  usual  procedure  for  incorporation  in   Over   But  not  over    
the   Philippines.   The   special   tax   rate   is   termed   as   such   because   it   is     P10,000    5%  
way  lower  than  the  usual  5%-­‐32%  graduated  tax  rate.  
  P10,000   P30,000   P500  +  10%  of  the  excess  over  P10,000  
• What  are  Multinational  Corporations?  
P30,000   P70,000   P2,500  +  15%  of  the  excess  over  P30,000  
-­‐ Corporations   which   have   operations   internationally   or   in   an  
international  level   P70,000   P140,000   P8,500  +  20%  of  the  excess  over  P70,000  
  P140,000   P250,000   P22,000  +  25%  of  the  excess  over  P140,000  
P250,000   P500,000   P50,000  +  30%  of  the  excess  over  P250,000  
TAXATION 1 A.Y. 2014 - PART 3 (based on the syllabus and discussion of Atty. Aranas)
By: RLB | DHB | TLD | RRM 3
P500,000     P125,000   +   32%   of   the   excess   over   ! Commission  
P500,000  in  200  and  onward   ! Profit  sharing  
  ! Monetized  vacation  and  sick  leave  
Note:  when  the  tax  due  exceeds  P2,000.00,  the  taxpayer  may  elect  to  pay  on  two  equal   ! Fringe  benefits  received  by  rank  &  file  employees  
installments,  the  first  installment  to  be  paid  at  the  time  the  return  is  filed  and  the  second   ! Hazard  pay    
installment   15   of   the   same   year   at   on   or   before   duly   the   authorized   agent   bank   (AAB)   ! Taxable  13  month  pay  and  other  benefits  
within   the   jurisdiction   of   the   revenue     district   office   (RDO)   where   the   taxpayer   is   ! Other   remunerations   received   froma   n   employee-­‐employer  
registered.   relationship  
III. INCLUSIONS  (GROSS  INCOME  FOR  INDIVIDUALS)   • Fringe   benefit   tax   for   managerial   employees   is   not   included   as  
1. Compensation  income     supplemental   compensation   because   it   is   subject   to   final   tax   –   Fringe  
i. Definition   Benefit  Tax  
-­‐ Any   amount   or   including   the  cash  value   of   those  you  receive   in  kind   under   • Add   the   regular   and   the   supplemental   compensation   and   subject   it   to  
an  ER-­‐EE  relationship  (determine  ER-­‐EE  relationship:  four-­‐fold  test)   graduated  tax  rate  (5%-­‐32%)  but  withhold  first  the  creditable  withholding  
-­‐ in   labor,   compensation   in   kind   is   not   allowed;   in   taxation   (since   nangwarta   tax   (gi-­‐discuss   daw   before-­‐means   of   collection   and   payment   of  
ang   gobyerno)     we   still   consider   its   cash   value   to   be   reported   as   income   compensation  income  is  through  withholding….wako  kasabot)  
subject  to  income  tax.   • Exclusion   –   P30,   000,   only   the   excess   of   the   P30,000   (nag.mention   pd   xa  
  nga   “except   for   overtime   pay”-­‐-­‐-­‐dili   nako   ma.gets   if   excluded   pd   ang  
COMPENSATION  in  KIND:   overtime   pay)   will   form   part   of   the   supplemental   income   added   to   the  
a. Stock  Options  –  ER  offers  (ownership)  shares  of  stock  to  EE   regular  compensation  
GR:  not  taxable    
EXC:  if  there  is  a  difference  between  the  actual  consideration  paid  by  the   iii. Doctrine  of  cash  equivalent  
employee  versus  the  FMV  of  the  stocks  –  there  is  a  gain   - if  you  are  paid  in  property  or  in  kind,  you  determine  the  cash  value  of  the  
Ex:   FMV   –   100;   EE   is   allowed   to   purchase   it   @   10.   The   90   difference   is   payment  of  that  particular  property  or  payment  in  kind  and  that  value  will  
subject  to  income  tax.   be  added  to  your  total  compensation  subject  to  income  tax  
b. Properties   iv. Mode  of  compensation  income  collection/payment  
-­‐ the  cash  equivalent  of  the  properties  is  subject  to  income  tax     - Through  withholding  
-­‐ use  the  cash  equivalent  doctrine   - Pay  the  balance  as  you  file  the  tax  return,  compute  as  follows:  
c. Promissory  Notes   Income  tax  due   P  
GR:  taxable  at  the  amount  equivalent  to  the  face  value  of  the  PN     Less:  withholding  tax    
EXC:  if  it  is  discounted,  the  amount  taxable  is  the  Discounted  Value.   Net  income  tax  due   P  
*discounted  value  –  value  lower  than  the  face  value  e.i  indorsing  the  note  
Ex:  Y  is  paid  a  PN  @  P10,000,  indorse  it  to  X  @  P9,000  (discounted).   *income  tax  due  –  for  the  whole  calendar  year  (January  1  –  December  
The   actual   amount   received   by   Y   is   P9,000   –   the   discounted   value   –   31)  
therefore  Y    is  taxable  @  P9,000   *withholding  tax  –  for  the  whole  year  
  *income   tax   due   must   be   equal   to   the   withholding   tax   so   that   net  
d. Cancellation  of  Indebtedness   income   due   will   be   zero   (0).   This   only   happens   if   the   individual  
-­‐ taxable  as  income  if  debt  is  cancelled  because  a  service  is  rendered  by   taxpayer  is  a  pure  compensation  income  earner  with  one  employer.  
the  employee.    
  NOTE:   Substituted   filing   if   income   tax   return   (“ITR”)   is   the   manner   by   which  
ii. Kinds:   declaration     of   income   of   individuals   receiving   purely   compensation   income   the  
a. Regular   compensation   –   includes   basic   salary,   fixed   allowances   for   taxes   of   which   have   been   withheld   correctly   by   their   employer’s   annual  
representation,  transportation  and  others  paid  to  an  employee   information   return   (BIR   form   no.   1604-­‐CF)   duly   stamped   received   by   the   BIR  
  may  be  considered  as  the  “substitute”  income  tax  return  (ITR)  of  the  employee.  
b. Supplemental   compensation   –   Includes   payments   to   an   example   in   However,  said  the  employees  may  still  file  ate  his/her  option.  
addition   to   the   regular   compensation   such   as   but   not   limited   to   the   - Income   Tax   Return   (BIR   Form   no.   1700)   –   if   the   taxpayer   files   it  
following:   personally  
! Overtime  pay   - Annual  Information  Return  (BIR  Form  no.  1604)  –  if  substituted  filling  
! Fees,  including  director’s  fees   by  the  employer  
TAXATION 1 A.Y. 2014 - PART 3 (based on the syllabus and discussion of Atty. Aranas)
By: RLB | DHB | TLD | RRM 4
  -­‐ technically,   rank   and   file   employees   do   not   receive   any   fringe  
• Who  can  avail  substituted  filing?   benefits   because   when   we   talk   of   fringe   benefit,   it   is   given   on  
- Employees  who  satisfies  all  of  the  following  conditions:   top  of  your  compensation  and  the  fringe  benefits  received  by  the  
1) Receiving   purely   compensation   income   regardless   of   rank  and  file  employees  forms  part  of  their  compensation.  
2) Working   for   only   one   employer   in   the   Philippines   for   the   • for  managerial  employees:  
calendar  year    
3) Tax   has   been   withheld   correctly   by   the   employer   (tax   due     Subject  to  final  tax  
Fringe  benefit   (Fringe  Benefit  Tax)  
equals  tax  withheld);    
4) The   employee’s   spouse   also   complies   with   all   three   (3)    
conditions  stated  above     compensation  
5) The   employer   files   the   annual   information   return(BIR   Form     Subject  to  graduated  
income  tax  
No.  1604  –  CF)    
6) The  employer  issues  BIR  Form  No.  2316  to  each  employee.    
-­‐ what  if  two  (2)  employers?  Substituted  filing  is  allowed,  but  at  the  end    
of  the  year,  you  must  file  a  consolidated  ITR  personally.   • for  rank  and  file  employees:    
-­‐ if   employer   incorrectly   withheld   the   amount   due,   employee   will   not    
be   guilty   of   tax   evasion.   You   look   into   the   reason   why   there   was   a    Compensation  
difference  and  BIR  will  just  collect  the  deficiency.   +   Fringe  Benefit  
-­‐  for   married   individuals,   their   ITR   will   be   consolidated   at   the   end   of   Total  compensation  income  –  Subject  to  graduated  income  tax  
the   year.   Reason:   one   is   for   the   additional   deduction;   the   additional    
deduction   will   only   be   claim   once.   Husband   will   claim,   and   wife   will   2. Kinds  of  Fringe  Benefits  [HEVHIMEHEL}  
also   claim   additional   deduction   –   as   a   rule,   only   one   can   claim….   a. Housing  
ma.alkansi  si  BIR☺    
  CASE   ANNUAL  VALUE   Monetary  Value  of  
v. Fringe  Benefits   of          BENEFIT   Benefit  (Monthly)  
1. Definition  
Employer  leases     50%  X  Monthly  rental  
NIRC,   Section   33.   (B)  Fringe   Benefit   defined.  -­‐  For  purposes  of  this  Section,  
residential  property  for   paid  by  the  employer  
the   term  "fringe   benefit"  means   any   good,   service   or   other   benefit  
use  of  the  employee   -­‐ The  50%  is  given  
furnished   or   granted   in   cash   or   in   kind   by   an   employer   to   an   individual  
under  the  regulation  
employee  (except  rank  and  file  employees  as  defined  herein)  such  as,  but  
as  a  sign  that  there  is  
not  limited  to,  the  following:.  
no  transfer  of  
(1)  Housing;    
ownership  from  the  
(2)  Expense  account;    
ER  to  EE  
(3)  Vehicle  of  any  kind;    
-­‐ If  there  is  transfer  of  
(4)  Household  personnel,  such  as  maid,  driver  and  others;    
ownership,  then  the  
(5)  Interest  on  loan  at  less  than  market  rate  to  the  extent  of  the  
entire  amount  is  
difference  between  the  market  rate  and  actual  rate  granted;    
taxable  as  fringe  
(6)  Membership  fees,  dues  and  other  expenses  borne  by  the  
employer  for  the  employee  in  social  and  athletic  clubs  or  other  
Employer  owns   5%  of  FMV  of   50%  x  Monthly  Value  of  
similar  organizations;    
(7)  Expenses  for  foreign  travel;     residential  property   land   the  benefit                                                                                              
which  was  assigned  to   improvements    
(8)  Holiday  and  vacation  expenses;    
an  officer  for  his  use  as   *Monthly  Value  =  
(9)  Educational  assistance  to  the  employee  or  his  dependents;  
residence  (no  transfer   Annual  Value  /12  mos.  
(10)  Life  or  health  insurance  and  other  non-­‐life  insurance   of  ownership)  
premiums  or  similar  amounts  in  excess  of  what  the  law  allows.   Employer  purchases   5%  of   50%  x  Monthly  Value  of  
  residential  property  on   acquisition  cost   Benefit  
installment  basis  and   excluding  
→ ”  except  rank  and  file  employees  as  defined  herein”  
allows  the  employee  to   interest  
TAXATION 1 A.Y. 2014 - PART 3 (based on the syllabus and discussion of Atty. Aranas)
By: RLB | DHB | TLD | RRM 5
use  the  same  as  his    
residence   Guidelines  in  valuation  of  Motor  Vehicles:  
Purchases  residential     Acquisition  cost  of  FMV  
property  and  transfers   whichever  is  higher   1   Purchase   the   motor   vehicle   in   the   Acquisition  Cost  
the  ownership  to  the   name  of  the  employee  
Purchases  residential     FMV  of  CIR  and  FMV  of   2   Provides  the  employee  with  cash  for   Amount  of  cash  received  by  the  employee  
property  and  transfers   Assessor,  whichever  is   the   purchase   of   a   motor   vehicle   in  
ownership  thereof  to   higher  minus  the  cost  of   the  name  of  the  employee  
his  employee  for  the   the  employee  
latter’s  residential  use   3   Shoulders  a  portion  of  the  amount  of   Amount  shouldered  by  the  employee  
at  a  price  less  than  the   the   purchase   price   of   a   motor  
employer’s  acquisition   vehicle  in  the  name  of  the  employee  
  4   Purchase   the   car   on   install   in   the   Acquisition   cost   (exclusive   of   interest)  
*Exceptions:   name  of  the  employees   divided  by  5  years  
I. Housing   privilege   of   officials   of   AFP,   Philippine   Navy   and  
Philippine  Air  Force;  
-­‐ Take  note  wala’I  Philippine  National  Police  ha..   5   Owns  and  maintains  a  fleet  of  motor   Acquisition   cost   of   all   motor   vehicles   not  
  vehicles   for   the   use   of   the   business   normally   used   in   business   divided   by   5  
II. A   housing   unit   which   is   situated   inside   or   within   the   maximum   of   of  the  employees   years   x   50%ount   of   rental   payment   for  
fifty  (50)  meters  from  the  perimeter  of  the  business  premises  or   motor   vehicles   not   normally   used   in  
factory.   business  x  50%  
-­‐ Exception:   wherein   the   EE   is   still   exempted   of   the   housing   6   Leases   and   maintains   a   fleet   of   Amount   of   rental   payment   for   motor  
privileged  of  up  to  100  meters  if  ER’s  factory  is  hazardous.   motor   vehicles   for   the   use   of   the   vehicles   not   normally   used   in   business   x  
  business  and  the  employees   50%  
III. Temporary  housing  for  an  employee  who  stays  in  a  housing  unit   7   The  use  of  yacht  whether  owned  and   Depreciation   of   yacht   at   an   estimated  
for  three  (3)  months  or  less.   maintained   or   leased   by   the   useful  life  of  20  years  
-­‐ Applies  to  transient  EE,  like  he  is  in  Manila  for  training  etc.   employer  
Atty  A:    take  note  that  other  than  compensation  income  is  what  we  call  as    
fringe   benefit.   Compensation   income   is   subject   to   5%   to   32%   graduated   d. Household  personnel  
income   tax   while   the   fringe   benefit   is   given   to   managerial   or   supervisory   e. Interest  on  loan  at  less  than  market  rate  
EE  subject  to  fringe  benefit  tax  of  32%,  which  is  a  final  tax.   f. Membership  fees,  dues  and  other  expenses  borne  by  the  ER  in  social  
  athletic  clubs  or  similar  organizations  
b. Expense  account   g. Expenses  for  foreign  travel  
-­‐ Refers  to  the  food,  grocery  or  other  representations   h. Holiday  and  vacation  expenses  
  i. Educational  assistance  to  the  EE  or  his  dependents  
c. Vehicle  of  any  kind   j. Life   or   health   insurance   and   other   non-­‐life   insurance   premiums   or  
-­‐ if   there   is   transfer   of   ownership   to   the   EE,   100%   of   the   value   is   similar  accounts  in  excess  of  the  law  allow  
subject  to  fringe  benefit  tax    
-­‐ if   no   transfer   of   ownership,   50%   of   the   value   only   is   subject   to    
-­‐ what  you  need  to  remember  here  is  that  you  need  to:    
# determine   first   if   the   EE   is   managerial   or   supervisory:   If   he  
is,  automatic  subject  to  FBT  
# next   you   need   to   determine   if   ownership   is   transferred   to  
the  EE:  if  it  was  transferred,  then  the  entire  value  is  subject  
to  FBT;  if  not  transferred,  only  50%  thereof.