wee, w ormanentra Chapter Exercises - Fringe Benefit Tax MULTIPLE CHOICE Choose the letter of the correct answer. mployer Principles 1. mployees to employees 1 Which of the following statements is correct? The fringe benefit tax is a final withholding tax on the grossed- up monetary value of the fringe benefit granted by the employer to an employee who holds a managerial or supervisory position. II. Fringe benefit tax is effective regardless of whether the employer is an individual, professional partnership or a corporation (regardless of whether the corporation is taxable or not). III. The fringe benefit tax regulations cover only those fringe benefits given or furnished to managerial or supervisory employees. The regulations do not cover those benefits which are part of compensation income, because these are subject to creditable withholding tax on compensation in accordance with RR No.2-98, as amended. a. Tonly c. I, II and III b. I and Il only d None of the above ays. -es in exces ployees. s or factory y ployees no /maintained 2. Statement 1: Fringe benefits are forms of incentives to employees. Statement 2: Fringe benefits include salaries, services, or other benefit given by employer to an individual employee. a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are correct d. Both statements are not correct ss travel of granted to ontract was 3. Which of the following statements regarding fringe benefit tax is wrong? a. Fringe benefit tax is imposed on the employee b. The employer is the one liable for the payment of fringe benefit tax c. Both "a" and "b" d. Neither "a" nor "b" nce of ployee nger of 4. This income of a resident alien holding managerial position is subject to basic tax a. Fringe benefit tax b. Interest income from Philippine currency deposit with Security Bank r quines 8 174