tax shields...

[shadow]

naisip ko lang yun mga tax shield ni corona, what are the different allowances and their corresponding maximum amount that a private employee legally avail?

[wowiesy]

naisip ko lang yun mga tax shield ni corona, what are the different allowances and their corresponding maximum amount that a private employee legally avail?

ang basic na alam ko as per Tax Code, can only fall under De Minimis benefits, or under Fringe Benefit (which is subject to Fringe Benefit Tax - used as tax shield by the company, not necessarily by the employee, pero nakikinabang din ang employee along the way)... For De Minimis - well... don't even bother as the Tax Code hasn't been updated for so long ( 1 sack rice per month, clothing allowance or laundry ata upto what.. mga 500 pesos lang ata or something and there are others).. basta.. mababa sya... sa Fringe Benefit.. well.. like car plan... it somehow benefits the employee... but the company (as I learned recently) needs to pay the Fringe Benefit Tax on those benefits... and the Fringe Benefit Tax paid, is subject for deduction for Income Tax purposes... (so aside from the actual fringe benefit as given na deductible sa income tax, the fringe benefit tax paid, is also deductible for income tax purposes - that is for the corporation or the owner of the company - hindi sa mga empleyado)...


the others.. well.. possibly result na ng "creative accounting" <?> ... yung ibang mga allowed deductions under a business (for income tax purposes).. may mga threshold din so di rin maipasok lahat (kahit na legit talaga ang mga expenses).. BIR puts a cap on the deductions (say, only upto xx% of sales ang puwede icharge na representation, etc)... possible na all these other "tax shields" ay talagang papasok sa business expenses as deductions to income tax... side issue na lang yung nakikinabang yung empleyado (like reimbursable receipts upto x,xxx per month, etc)..

sa Supreme Court.. well.. perhaps wala pang na issue na LA ang BIR in all its history sa isang sitting Supreme Court Justice... kaya siguro la pa precedent... and if the alpha list (as per testimony of witness Bayuga) only indicates the basic salary, BIR wouldn't also have a basis to even suspect that they can possibly assess deficiency tax on the other incomes from within the total compensation received from the Judiciary...

kaya nga nabanggit ko ata in a separate thread.. possible stalemate uli ito... all tax cases eventually go through CTA (Court of Tax Appeals) and then eventually sa Supreme Court... so.. granted na mag LA ang BIR sa ganitong kaso on a sitting Justice.. the process for the tax assessments.. eventually aakyat ng CTA ang SC... so will SC decide against itself kung sakali? *assuming of course that the SC justices will fight the assessments all the way through and will only pay the deficiency taxes kapag may final ruling na*... maaari din naman na the SC made its internal rules that these allocations are tax free... but then, only the House of Representatives ang pwede mag start ng mga tax measures (such as exemptions) so legal issue uli... unless nakalagay sa Law (anumang batas kung saan pinagbasehan ng Supreme Court yung mga other allocations na to aside from basic salary na tax free na talaga ito)...

[wowiesy]

De Minimis:

The BIR sets a limit on the value of tax-exempt de minimis benefits. Under RR 8-00, as amended by RR 10-00, the BIR considers the following as de minimis benefits:

10 days monetized unused vacation leave credits;
medical cash allowance to dependents of employees not exceeding P750 per semester or P125 per month;
rice subsidy of P1,000.00 or one-sack of rice per month;
uniforms and clothing allowance not exceeding P3,000.00 per year;
medical benefits not exceeding P10,000.00;
laundry allowance of P300 per month;
employee achievement awards in the form of tangible personal property other than cash or gift certificate, with an annual monetary value not exceeding P10,000 received by the employee under an established written plan;
flowers, fruits, books or similar items given to employees under special circumstances, e.g. on account of illness, marriage, birth of a baby, etc.; and
daily meal allowance for overtime work not exceeding 25% of the basic minimum wage.

[CVT]

^^^ Ayos bro.,- maibigay ko nga ito sa HR namin...
15.2K:froggy:

[shadow]

I know the de minimis... na walang ka kwenta kwenta...any other tax shield na malaking amount na pwedeng mawala? fringe benefits hinde rin pwede yan dahil more or less company sumasalo eh...

wala ba sa private katulad ng sa SC na mga RATA, special allowance, etc, etc.na tax free?

paano mababawasan ng 10-12% tax ang monthly income?

honestly I alaready to talked to a tax lawyer, more or less ganyan din mga sinasabi... I want what Corona is getting kahit yun mga tax free allowances lang niya...bwisit!

hinde rin pwede na liitian ang basic then mas malaki ang allowance, since meron ngang capped ang allowances...

[shadow]

since OFWs are income tax free, what if palabasin na OFW ang contract eh sa abroad but supposedly assigned and based here, will it fly?

expat but tax free?

[CVT]

Register the company as Regional HQ..... 15% lang ang tax ng mga empleyado, pero may cut off ang sweldo at position....

But, you have to show branches in Asia....
15.2K:froggy:

[wowiesy]

I know the de minimis... na walang ka kwenta kwenta...any other tax shield na malaking amount na pwedeng mawala? fringe benefits hinde rin pwede yan dahil more or less company sumasalo eh...

wala ba sa private katulad ng sa SC na mga RATA, special allowance, etc, etc.na tax free?

paano mababawasan ng 10-12% tax ang monthly income?

honestly I alaready to talked to a tax lawyer, more or less ganyan din mga sinasabi... I want what Corona is getting kahit yun mga tax free allowances lang niya...bwisit!

hinde rin pwede na liitian ang basic then mas malaki ang allowance, since meron ngang capped ang allowances...

I think wala na. Either de minimis, fringe benefit ( at least nakinabang din employee) or creative accounting.... There is a provision na basta business related and for the benefit of the employer... Sonsa provision na yan maaari siguro masubujsn... But the company runs the risk of tax exposure

[skybison]

Nuong nasa telco pa ako dati, me certain position ka para magka "TAX SHIELD" which is 30% of your salary. So magiging "allowance" yun, kaya kami ng mga officemates ko hingi ng hingi ng mga OR, lalo na sa pagkain (every quarter ata ang pagpasa). Hahaha!

Pero according to my sources, hindi na raw nila eto pinapractice at dini-discourage na ng SGV yun ganitong practice.

*ts, try to explore yun nabanggit the "double book", hehe same tayo case ngayon employer/employee. Naalaala ko minsan sa management meeting namin na nisuggest nun accountant namin etong double book. Kaso dumudugo ilong ko kaya wala akong interes makinig. Lmao

[_Qwerty_]

the only legal way is thru maximizing the de minimis benefit (exempt from fringe benefit tax)..

What are De Minimis benefits?
The term “De Minimis” benefits which are exempt from the fringe benefit tax shall, in general, be limited to facilities or privileges furnished or offered by an employer to his employees that are of relatively small value and are offered or furnished by the employer merely as a means of promoting the health, goodwill, contentment, or efficiency of his employees. The following are considered as “de minimis” benefits granted to each employee as updated by Revenue Regulation (RR) 5-2011:
(a) Monetized unused vacation leave credits of private employees not exceeding 10 days during the year
(b) Monetized value of vacation and sick leave credits paid to government officials and employees;
(c) Medical cash allowance to dependents of employees not exceeding P750.00 per employee per semester or P125 per month;
(d) Rice subsidy of P1,500.00 or one (1) sack of 50-kg rice per month amounting to not more than P1,500.00;
(e) Uniforms and clothing allowance not exceeding P4,000 per annum;
(f) Actual medical assistance, e.g. medical allowance to cover medical and healthcare needs, annual medical/executive check-up, maternity assistance, and routine consultations, not exceeding P10,000 per annum;
(g) Laundry allowance not exceeding P300 per month;
(h) Employees achievement awards, e.g., for length of service or safety achievement, which must be in the form of a tangible personal property other than cash or gift certificate, with an annual monetary value not exceeding P10,000.00 received by the employee under an established written plan which does not discriminate in favor of highly paid employees;
(i) Gifts given during Christmas and major anniversary celebrations not exceeding P5,000 per employee per annum; and
(j) Daily meal allowance for overtime work and night/graveyard shift not exceeding 25% of the basic minimum wage on a per region basis.

[Ry_Tower]

the only legal way is thru maximizing the de minimis benefit (exempt from fringe benefit tax)..

^ maliit lang but it's better than nothing.

[crazy_boy]

mahirap yung mga salary na converted to allowance. kasi kung lilipat ka na sa ibang company, lalabas na maliit lang yung basic pay mo.

[_Qwerty_]

kung i ma maximize yan.. hindi na din maliit yan..

a. 10 days per year (kung 500 per day) this is 5T
c. Medical cash allowance, 125 per month x 12 = 1,500 per year
d. rice 1,500 per month x 12 = 18T
e. uniform 4T
f. medical assistance 10T
g. laundry 3,600
h. achievement award 10T
i. gift 5T
j. daily meal = 25% of basic.. 500 x .25 = 125 x 22 = 2,750 a month x 12 = 33T

So ang total lahat nyan eh over 90T na.. tax free..

^ maliit lang but it's better than nothing.

[TholitzReloaded]

Nuong nasa telco pa ako dati, me certain position ka para magka "TAX SHIELD" which is 30% of your salary. So magiging "allowance" yun, kaya kami ng mga officemates ko hingi ng hingi ng mga OR, lalo na sa pagkain (every quarter ata ang pagpasa). Hahaha!

Pero according to my sources, hindi na raw nila eto pinapractice at dini-discourage na ng SGV yun ganitong practice.

*ts, try to explore yun nabanggit the "double book", hehe same tayo case ngayon employer/employee. Naalaala ko minsan sa management meeting namin na nisuggest nun accountant namin etong double book. Kaso dumudugo ilong ko kaya wala akong interes makinig. Lmao

What's a double book? Are you saying the company has to accounts one hidden from BIR and the other one is Declared? Kindly clarify. Thanks.

[skybison]

What's a double book? Are you saying the company has to accounts one hidden from BIR and the other one is Declared? Kindly clarify. Thanks.

Parang ganun, hindi ko na pinakinggan paano yun diskarte dun kasi accounting-bobo ako. Nosebleed sa mga terminologies...