BIR Ruling [DA-051-97]

February 2, 1997 BIR RULING [DA-051-97] The Philippine American Life Insurance Company Philamlife Building United Nations Avenue Manila Attention: Mr . Archilo A . Matugas Sr . Corp . HR Officer Gentlemen : This refers to your letter dated October 1, 1996 requesting a ruling as to whether meal allowances are integral part of compensation income subject to withholding tax. cdi In reply, please be informed that pursuant to Section 2, Revenue Regulations No. 6-82 as amended by Revenue Regulations No. 12-86 implementing Section 28, of the Tax Code, as amended by Executive Order No. 37, facilities or privileges such as entertainment, medical services or so called courtesy discounts on purchase of goods furnished or offered by an employer to his employees are generally not considered as compensation subject to withholding tax if such facilities or privileges are of relatively small value and are furnished or offered by the employer merely as a means of promoting health, goodwill contentment or efficiency of his employees. Such being the case, the monthly meal allowances worth P525.00 for employees and P1,000.00 for officers need not be included as compensation subject to withholding tax if they are given for the convenience of the employer (Section 2 Revenue Regulations No. 1 BIR Ruling No. 023-85). (BIR Ruling No. 065-90 dated April 23, 1990 and 529-88 dated November 7, 1988) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: ALICIA L. TOMACRUZ Head Revenue Executive Assistant (Legal Service)