BIR Ruling [DA-169-96]

May 10, 1996 BIR RULING [DA-169-96] MEMORANDUM FOR : The Assistant Commissioner Collection Service This refers to your letter dated December 14, 1995 requesting for a ruling on whether or not the hazard duty pay received by officials and employees of the National Government, State Universities and Colleges, Government-owned or Controlled Corporations and Financial Institutions assigned in work areas stated in the National Compensation Circular No. 76 of the Department of Budget and Management (DBM), is subject to the withholding tax. In reply, please be informed that hazard duty pay is embraced within the term compensation, which means all remunerations for services performed by an employee for his employer unless specifically excepted under Sections 27, 28 (b) and 71 of the Tax Code, as amended. Compensation income includes all income payments received as a result of an employer-employee relationship, such as salaries, wages, honoraria, bonus, taxable pensions, allowances, fringe benefits, fees, and other income of similar nature. (Revenue Regulations No. 6-82, as amended by Revenue Regulations No. 12-86; BIR Ruling No. 266-93 dated June 18, 1993). Such being the case, the hazard duty pay received by the aforesaid officials and employees in accordance with National Compensation Circular No. 76 issued by the DBM on March 31, 1995, is subject to income tax and consequently to the withholding tax on wages prescribed under Section 72, Chapter 10, Title II of the Tax Code, as amended. (SGD.) ALICIA P. CLEMENO Assistant Commissioner (Legal Service)