BIR Ruling

October 18, 1973 Miss Rosario G. Chew Consumer Pulse, Inc. 2208 Almeda Compound Pasong Tamo, Makati, Rizal M a d a m : This refers to your letter dated July 17, 1973 requesting information as to the taxability of the pension in the total amount of P70,725.20 which, as represented, was received by you from the Procter & Gamble Philippine Manufacturing Corporation Pension Plan when you voluntarily resigned from the service of Procter & Gamble Philippine Manufacturing Corporation on December 31, 1970. cdtech In reply thereto, I have the honor to inform you that pursuant to Republic Act No. 4917 as amplified by Revenue Regulations No. 1-68 dated March 25, 1968, the retirement benefits received by officials and employees who have been in the service of the same private firm for at least ten (10) years and who are not less than fifty (50) years of age at the time of retirement are exempt from all taxes provided that the retirement benefits are in accordance with a reasonable private benefit plan maintained by the employer. Under the final proviso of Section 1, Republic Act No. 4917, any amount received by an official or employee from his employer by reason of death, sickness or other physical disability or for any cause beyond the control of the official or employee is likewise exempt from taxes regardless of age or length of service. In view of all the foregoing, and considering that you separated from the service of your employer, Procter & Gamble Philippine Manufacturing Corporation by voluntary resignation and not by retirement dates specified by the Rules and Regulations of the Procter & Gamble Philippine Manufacturing Corporation Pension Plan, the qualification of which as a tax-exempt retirement benefit plan under Republic Act No. 4917 has been determined and approved by this Office on January 29, 1969, nor by involuntary separation or separation for "any cause beyond the control of the employee", this Office is of the opinion as it hereby holds that the amount of P70,725.20 which you received from and/or under the plan on account of such resignation or separation is subject to income tax; that the deduction and withholding of the income tax on the aforesaid amount of P70,725.20 are legal and proper; and that the refund thereof cannot be granted. aisadc Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5