BIR Ruling [DA-069-01]

April 20, 2001 BIR RULING [DA-069-01] Bureau of Standards 3rd Floor, DTI Building 361 Sen. Gil Puyat Makati Attention: Ms . Erlinda Y . Maulit Director IV Gentlemen : This refers to your letter dated January 24, 2000, in relation to the letter of Dr. Elpidio A. dela Cruz, President of the Bacarra Federated Senior Citizens, requesting clarification if pension is considered as an income for purposes of eligibility as a Senior Citizen. Gleaned from the letter of Dr. dela Cruz, Senior Citizens receiving pensions in Philippine pesos even if it is more than P60,000.00 annually are allowed to enlist at the Office for Senior Citizens Affairs (OSCA) and be issued a national identification card. However, applications of Senior Citizens whose pensions are in US dollars are not accepted. In reply, please be informed that for purposes of granting tax exemptions and other privileges to senior citizens under R.A. 7432, Section 2(b) of RR 2-94 defines a "qualified senior citizen" as any resident citizen of the Philippines, at least 60 years old, including those who have retired from both government offices and private enterprises and has an income of not more than P60,000 per annum subject to review by the NEDA every three years. Thus, a senior citizen may be granted tax exemption if he meets the following requirements: 1. He must be a resident Filipino citizen; 2. He must be at least 60 years old; 3. His gross annual taxable income, whether in the form of compensation, business and other income from all sources, except income derived from passive investments, must not be more than P60,000; 4. He must have been qualified as such by the Regional Director. In other words, for as long as the said pension income of the resident Filipino senior citizen does not exceed P60,000, whether he received the same in Philippine Pesos or in U.S. Dollars, and it meets all the other abovementioned requirements, the senior citizen may enjoy all the tax exemptions and other privileges granted under R.A. 7432, as implemented by RR 2-94. Accordingly, if the pension which exceeds P60,000 is a taxable pension income, the senior citizen is not entitled to the benefit of R.A. 7432, whereas if the same is a non-taxable pension income, R.A. 7432 is applicable. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. ACDIcS Very truly yours, Commissioner of Internal Revenue By: (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal and Inspection Group