BIR Ruling

June 26, 1968 Mr. Emilio Agregado National Waterworks & Sewerage Authority Arroceros Street, Manila S i r : This refers to your letter dated February 2, 1968 requesting legal opinion on a query stated as follows: "1. Are commutable transportation and representation allowances considered as income which should be included in the income tax returns? "2. If so, may these allowances be included among the allowable deductions? "3. If deductible, may these be deducted in full or there are certain conditions and requisites to be complied with and if so, what are these?" In reply thereto, I have the honor to inform you that allowances for transportation and representation, in addition to the agreed compensation, are payments for services rendered and form part of the recipient's gross income pursuant to Section 29 of the Tax Code. Accordingly, said allowances are taxable and should be properly reflected in the recipient's income tax return. However, said expenses for transportation and representation actually incurred and duly supported by receipts or other evidence are deductible from your gross income. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue