BIR Ruling

May 29, 1970 Mrs. Marina M. Catapang Batangas City, F-104 M a d a m : This refers to your letter dated March 19, 1970 requesting information on whether or not insurance premiums paid by a corporation for the insurance of the life of its officer, with itself as beneficiary under such policy, are deductible from its gross income. In reply, I have the honor to inform you that premiums paid by a corporation on any life insurance policy covering the life on any of its officers or employees with itself as the beneficiary under such policy are not deductible from the gross income of such corporation (Sec. 31(a)(4), Tax Code). The reason for the non-deductibility of said premiums if the taxpayer is a beneficiary is that these premiums are in the nature of an investment of corporate capital; another reason is that life insurance proceeds are, when received, excluded from gross income (Mertens, Law of Federal Income Taxation, Vol. 4A, ch. 25, sec. 25. 102, pp. 431-432). cdta In view thereof, the annual insurance premiums in the amount of P44,000.00 paid by X corporation on the life insurance policy covering the life of its Secretary Treasurer "C", as adverted to in your letter, are not deductible from the gross income of said X Corporation. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue