BIR Ruling

February 27, 1969 Mr. Severino Mercao 365 Shaw Blvd. Mandaluyong, Rizal S i r : This refers to your letter dated February 6, 1969 requesting a ruling as to whether or not retiring Filipino civilian employees of U.S. military establishments are entitled to the benefits provided under R. A. 4917. It is represented that 99% of Filipino civilian employees of military establishments of the Federal government of the U.S. are covered by the Social Security System of the Philippines and that 1% are covered by the U.S Civil Service Retirement Act. In reply thereto, I have the honor to inform you that pursuant to Section 1 of R. A. 4917 retirement benefits received by officials and employees of private firms whether individual or corporate, in accordance with a reasonable private benefit plan maintained by the employer shall be exempt from all taxes. The exemption from all taxes of retirement benefit under R.A. 4917 refers to retirement benefits received from private firms and in accordance with a reasonable private benefit plan. There is no law, however, under which retirement benefits received by Filipino civilian employees in U.S. military establishments can be exempted. Accordingly, said retirement benefits are subject to income tax. cdt Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue