BIR Ruling [DA-216-01]

October 24, 2001 BIR RULING [DA-216-01] 32 & 34; 24-95; DA-11-97 San Miguel Corporation Beer Division Brgy. Darong, Sta Rosa Davao del Sur Attention: Mr. Salvador V. Abadesco Manager, HR & A Mr. Sivestre G. Regis Union President Gentlemen : This refers to your letter dated March 29, 2001 requesting for a ruling on whether or not a one-time non-basic wage benefit under San Miguel Corporation's (SMS) recently concluded CBA which is called "One-Time grant" in a 3-year package is taxable or exempt. In reply, please be informed that Section 2.33(C) of Revenue Regulation No. 3-98 provides, viz: "(C) Fringe Benefits Not Subject to Fringe Benefits Tax In general, the fringe benefits tax shall not be imposed on the following benefits: xxx xxx xxx "(3) Benefits given to the rank and file, whether granted under a collective bargaining agreement or not; xxx xxx xxx Thus, the subject one-time non-basic wage benefit under your company's recently concluded CBA, which is called "One-Time Grant" in a 3-year package is not subject to the fringe benefits tax. However, the said benefit shall form part of the compensation income of the subject employees which shall be subject to income tax and consequently, to the withholding tax on compensation income under Section 2.78.1 of Revenue Regulations No. 2-98, as amended. This ruling is being issued on the basis of the foregoing facts as represented. If, upon investigation, it will be ascertained that the facts are different, then this ruling shall be null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner