BIR Ruling

March 12, 1976 Mr. Paulino A. Andrada Mabini, Urdaneta Pangasinan S i r : In reply to your letter dated February 15, 1976, I have the honor to inform you that the monthly retirement pension or annuity being received by you from the Philippine Social Security System as a retired employee of the Philippine American Life Insurance Company is not subject to income tax pursuant to Republic Act No. 1161 and not Presidential Decree No. 220 which exempts from Philippine income tax, social security benefits, gratuities, pensions or other similar benefits received by resident citizens, resident aliens and non-resident citizens from foreign governments or from foreign private entities during the taxable year 1973 and thereafter. Such monthly pensions or annuity need not, therefore, be included or declared in your income tax return which you are nevertheless required to file if you derive any other income from any source of at least P1,800.00 for the taxable year or if you fall under any of the following categories: "(A) Is an official or employee of the government or has a contract with the Government of the Republic of the Philippines, or any of its agencies or instrumentalities, including government-owned or controlled corporations, regardless of the nature of his appointment or duration of his employment; cdt "(B) Is a professional as defined herein below; "(C) Is a registered or beneficial owner of mortgagee of any real property; "(D) Is a registered or beneficial owner, or mortgagee of any motor vehicles; "(E) Is a registered or beneficial owner, or mortgagee of any share of stock or security of a corporation, of any interest in a firm or partnership; "(F) Has travelled abroad, except children below eighteen years of age; "(G) Has filed a certificate of candidacy for any public office except barrio officials and municipal councilors; "(H) Is engaged in trade or commerce." (Section 45(a) (3), N.I.R.C. as amended by R.A. No. 6110 and P.D. 69). regardless of the amount of income. Said pension is not also subject to the annual additional residence tax (class B) but you are still required to secure annually the basic residence tax (class A). acd Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3