Tax Solutions on Employee Compensation and Benefits, 2nd Edition 2019

998.00

Tax Solutions on Employee Compensation and Benefits, 2nd Edition, presents the changes on compensation income tax under R.A. 10963 or the TRAIN Law. The rates and withholding rules have changed after the passage of the law with the new withholding tax tables. The book however, addresses the main challenge for employers which is saving on tax while maximizing the take home of employees.

 

This work tackles this matter with the presentation of options to minimize tax implications. The revenue regulation, RR 8-2018 implements the TRAIN Law and is discussed in this work in a manner designed for understanding.

 

RR 11-2018 was also issued by the BIR which primarily deals with the changes on withholding rules. The author provides several sample computations and illustrations
of important concepts like exemption of compensation income of minimum wage earners. Tax on income beyond the non-taxable limit of P20,833 per month. Exclusions from substituted filing rules, among others. The preferential tax treatment of alien employees has been removed.

 

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The TRAIN Law likewise increases the ceiling for the 13 th month pay and other benefits from the previous P82,000.00 to P90,000.00. This is another useful item to maximize the grant of benefits with minimal tax impact.

 

De Minimis Benefits are discussed in a comprehensive manner focusing on its availability for tax savings. The list has been updated and some amounts have been increased like that of rice subsidy, medical allowance for dependents, and uniform and clothing allowance.

 

Fringe benefits are also discussed in combination with all the other benefits granted by the new law and regulations. It is now at 35% which is an increase from the former 32%. The rules on computation of grossed-up monetary value, value of the benefits, and tax accounting rules of the benefits are detailed with examples.

 

HR and compensation and benefits practitioner as well as managers and business owners will appreciate the exposition of the rules, doctrines and principles under the new tax system.

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Description

Title: Tax Solutions on Employee Compensation and Benefits, 2nd Edition 2019
Author: Atty. Elvin B. Villanueva
Publisher:
Central Book Supply, Inc.
ISBN: 
978-621-02-0723-1
No. Of Pages:
Approx. 230
Size:  6″x9″
Binding: Softbound

TABLE OF CONTENTS

Preface

Introduction

CHAPTER I

BASIC TAXATION PRINCIPLES

  1. The power to tax

A.1      Limitations on the power to tax

CHAPTER II

INCOME TAX

  1. Definition of Income
  2. Taxability of Income

B.1       Requisites for taxability

  1. Individual as taxpayer

C.1       Tax on an employee under the TRAIN Law

C.1.1 Tax rules governing employees

C.1.2    Employee as resident citizen

C.2       Tax rates

C.2.1    Basis of computation of wages

C.3       Withholding of tax on compensation income

C.3.1    Not qualified for substituted filing

C.3.2    Frequency of payment of wages

C.3.4    Suggested formula in obtaining equivalent monthly rate

C.4       Basic rules on withholding

C.4.1    Exemption from withholding tax on compensation

C.4.2    Withholding tax table under TRAIN law

C.5       How to determine the amount to be withheld using the withholding tax table

C.6       Illustration

CHAPTER III

MAXIMIZING TAX SAVINGS UNDER THE TRAIN LAW

  1. NON-TAXABLE LIMIT UNDER THE TRAIN LAW
  2. GRANTING AN ALLOWANCE

CHAPTER IV

13TH MONTH PAY AND OTHER BENEFITS

  1. REVISED CEILING OF 13TH MONTH PAY AND OTHER BENEFITS

A.1            Coverage of 13th month pay

A.2            Exclusion from the benefit

A.2.1   Meaning of “its equivalent”

A.3 Illustration

CHAPTER V

DE MINIMIS BENEFITS

  1. MEANING OF DE MINIMIS BENEFITS (DMB)

A.1            Amended list

A.2 Sample annual values of DMB

A.3 Illustrating the effect of DMB beyond the non-taxable range of WT table

CHAPTER VI

TAX TREATMENT

ON NEWLY HIRED EMPLOYEES WITH PREVIOUS EMPLOYER

  1. Cumulative average method

A.1            Use of cumulative average method

  1. Applying average cumulative method to newly hired employee with previous employer within the calendar year

CHAPTER VII

TAX TREATMENT

ON EMPLOYEE TERMINATED BEFORE THE END OF CALENDAR YEAR

  1. Annualized Withholding Tax Method

A.1            Treatment of deficiency or excess

A.2            Illustration of annualized computation

A.3 Illustration of Year-End Adjustments

A.4 Withholding tax on compensation of employees other than rank-and-file

CHAPTER VIII

FRINGE BENEFITS

  1. NEW RATES ON FRINGE BENEFITS

A.1            Fringe benefit tax is payable by employer

A.2            Fringe benefits rates for local and alien employees

A.3            Grossed-up monetary value (GMV) of benefit

A.4 Certain fringe benefits

A.4.1 Non-taxable fringe benefits

A.5 Illustration of grant of fringe benefits

  1. DETERMINATION OF THE AMOUNT SUBJECT TO THE FRINGE BENEFIT TAX

B.1 Value of fringe benefits

B.2 Housing privilege to company directors who received fixed salaries as company officers taken from retained earnings

B.3 Ruling on housing allowance

B.4 Treatment of car plan for managers and executives

B.5 Leased car used for official and personal purposes

B.6 Case of car maintenance allowance

B.7 Fringe benefit ruled as for convenience of employer

B.8 Tax accounting for the fringe benefit furnished to the employee and the fringe benefit tax due thereon

B.9 Tax credit (TCC) cannot be used against the FBT liability of employer

B.10 Tax accounting of fringe benefits

CHAPTER IX

RETURNS AND PAYMENT OF TAXES WITHHELD AT SOURCE

  1. MANNER, VENUE AND TIME OF FILING OF WITHHOLDING TAX RETURNS AND PAYMENT OF TAXES WITHHELD AT SOURCE
  2. WITHHOLDING TAX STATEMENT FOR TAXES WITHHELD
  3. ANNUAL INFORMATION RETURN AND ANNUAL ALPHABETICAL LIST OF PAYEES FOR INCOME TAX WITHHELD AT SOURCE

CHAPTER X

REGISTRATION AND OTHER RULES ON WITHHOLDING

  1. APPLICATION FOR REGISTRATION FOR INDIVIDUALS EARNING COMPENSATION INCOME (BIR FORM NO. 1902)
  2. CURRENT MULTIPLE EMPLOYMENTS
  3. SUCCESSIVE MULTIPLE EMPLOYMENT
  4. PROCEDURES FOR THE FILING OF THE APPLICATION FOR REGISTRATION (BIR FORM NO. 1902) AND/OR APPLICATION FOR REGISTRATION INFORMATION UPDATE (BIR FORM NO. 1905)
  5. EMPLOYEES WITHHOLDING STATEMENTS (BIR FORM 2316)
  6. SUBSTITUTED FILING OF INCOME TAX RETURNS BY EMPLOYEES RECEIVING PURELY COMPENSATION INCOME

F.1 Return for Individuals Earning Purely Compensation Income (BIR Form No. 1700)

 

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Weight .51 kg
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