Chapter 3

• Fringe benefits - encompass a wide range of non-cash compensations and perks provided by employers to employees.
• According to NIRC, fringe benefits are considered as part of an employee's taxable compensation income and are subject to income tax.
• The value of fringe benefits is added to the employee's gross income and taxed at progressive rates, similar to regular salary or wages.
• The value of fringe benefits provided to employees is generally based on their fair market value.
• BIR Form 1604CF - employers are required to report fringe benefits provided to employees on their annual income tax returns
• BIR Form 2316 - corresponding certificates to employees indicating the value of fringe benefits received
• Self-employed individuals and professionals - are also subject to taxation on fringe benefits they receive in connection with their business or profession
• BIR - they periodically issues ruling, regulations, and circulars that may affect the tax treatment of fringe benefits