BIR Ruling

August 30, 1976 Upjohn Inc. (Philippines) Room 402, Filipinas Life Bldg. Ayala Avenue Makati, Rizal D-708 Attention: Mr . A . F . Villacorta Office and Finance Manager Gentlemen : In reply to your request for determination of the qualification under Republic Act No. 4917 of the Upjohn Inc. (Philippines) Retirement Plan, I have the honor to inform you that a close perusal of the written program constituting the Plan, Trust Agreement, Statement of Actuarial Assumptions or Valuations and Terminal Funding Contract with the Insular Life Assurance Co., Ltd. which were submitted by you for this purpose, disclosed the following: 1. It is a definite written program; 2. It is more or less permanent in character; 3. It covers all regular employees of the company; 4. It is non-discriminatory; and 5. Finally, it provides that no part of the corpus or income of the Trust Fund shall be used for or diverted to purposes other than for the exclusive benefit of the member-employees and their beneficiaries. Having met the requirements of the law and the regulations, the Upjohn Inc. (Philippines) Retirement Plan qualifies as a reasonable retirement benefit plan within the contemplation of Republic Act No. 4917. Accordingly, the retirement benefits to be received by the member-employees shall be exempt from all taxes; and the contributions of Upjohn Inc. (Philippines) to the fund in the amount actuarially determined are deductible from its gross income. It may be stated in this connection, however, that any and all amounts to be received under the Plan by a member-employee voluntarily resigning or separated from the service of the company shall be subject to income tax. (See No. 11, Plan Rules) The company's contributions to the Fund to cover past service liability should be apportioned in equal parts over a period of ten consecutive years beginning with the year in which the transfer or payment if made pursuant to Section 30(j) of the Tax Code as amplified by Section 118 of the Income Tax Regulations. It is of course understood that the Plan shall continue to qualify thru all the years that it shall be in operation; that all forfeitures arising under the operation of the Plan shall be applied to reduce employer contribution; and that any modification or amendment that shall hereafter be made to the Plan should be submitted to this office for certification that any such amendment or modification does not affect the qualification of the Plan. aisa dc Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."