BIR Ruling [DA-260-04]
BIR Ruling [DA-260-04] • Bureau of Internal Revenue (BIR) Issuances • Rulings (Unnumbered) • May 17, 2004
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May 17, 2004 BIR RULING [DA-260-04] March 25, 2004 Philippine-Sundt Construction & Development Corporation Building #88, Philexcel Compound M.A. Roxas Highway, Clarkfield Pampanga Attention: Ms. Presentacion de Jesus Bombeta Personnel Manager Gentlemen : This refers to your letter dated January 11, 2002 requesting for a ruling on the following: aICcHA 1. Is cost of living allowance (referring to the P15.00 allowance provided last November and another P15.00 this February) classified as taxable or non-taxable allowance? 2. If it is non-taxable, what is the maximum amount of COLA allowable? 3. Since COLA is presently provided only to minimum wage earners in Metro Manila, can COLA be provided to other employees particularly those not covered by the latest ruling- i.e. provincial employees, non-minimum wage earners? It is represented that Philippine-Sundt Construction and Development Corporation is a construction company with main office at the Clark Development Zone in Pampanga; and that COLA is not among those listed as non-taxable " de minimis benefit under Revenue Regulations No. 10-2000. In reply, please be informed as follows: "Gross compensation income" includes all income payments received as a result of an employer-employee relationship, such as salaries, wages, honoraria, bonus, taxable pensions, allowances for transportation, representation, entertainment, fees, fringe benefits, fees and other income of similar nature. aETADI Thus, the cost of living allowance (COLA) which has been integrated into the basic salary of Philippine-Sundt Construction and Development Corporation's employees is considered compensation income subject to income tax and consequently, to the withholding tax on wages prescribed by Section 79 in relation to Section 24 (A) of the Tax Code of 1997. (BIR Ruling No. DA-287-96 dated August 2, 1996 and BIR Ruling No. 149-92 dated May 19, 1992) It is not within the jurisdiction of this Office to answer questions no. 2 and 3. You may address your query with the Chief of Legislative Calendaring Section, Batasan Hills, Quezon City. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group
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