BIR Ruling

September 3, 1969 1st Indorsement Referred to the Chief, Withholding Tax Division, thru the Revenue Operations Head (Assessment) the letter dated September 2, 1969 of Mr. Eustaquio A. Foz relative to his claim for the refund of the tax withheld from the retirement benefits he received from the Philippine Match Company. The retirement plan of the Philippine Match is presently being processed and had been in operation long before the enactment of Republic Act No. 4917. The Plan is found definitely to be reasonable and non-discriminatory in its operations particularly as to coverage and amount of benefits. It meets substantially the requirements prescribed by the law for a reasonable plan, as amplified by Revenue Regulations No. 1-68. The benefits received by retiring employees under the Plan is, therefore, exempt from tax regardless of the fact of whether or not the Fund may subsequently be found as not constituting an employees' trust which is being threshed out. At most, therefore, the Trust Fund may be subject to tax on its income, but, notwithstanding, the retirement benefits derived therefrom shall remain exempt from tax. cdlex The claim for refund of Mr. Foz may now, therefore, be given due course. (SGD.) MISAEL P. VERA Commissioner of Internal Revenue