BIR Ruling [DA-287-97]

August 26, 1997 BIR RULING [DA-287-97] Office of the President Commission on Higher Education DAP Building, San Miguel Avenue, Ortigas Center, Pasig City Attention: Secretary Angel C. Alcala Chairman Gentlemen: This refers to your letter dated July 22, 1997 requesting for a ruling as to whether or not honoraria constitute compensation income. You stated that this question concerns a provision of Republic Act No. 8292 (Higher Education Modernization Act of 1997) which states that the members of the governing boards of state universities and colleges shall serve without compensation. In reply, please be informed that pertinent provision of Revenue Regulations No. 12-86, amending Revenue Regulations No. 6-82, otherwise known as the Withholding Tax Regulations on Compensation provides as follows: "Section 2(2). Gross Compensation Income. (a) In general For purposes of withholding tax, the term "compensation" means all remuneration for services performed by an employee for his employer unless specifically excepted under Sections 29 [now Sec. 28] and 90 [now Sec. 71(a)] of the National Internal Revenue Code. The name by which the remuneration for services is designated is immaterial. Thus, salaries, wages, emoluments and honoraria, bonuses, allowances (such as transportation, representation, entertainment and the like), fringe benefits (monetary and non-monetary), fees, including doctor's fees, taxable pensions and retirement pay, and other income of a similar nature constitute compensation income. (Emphasis supplied.) acITSD xxx xxx xxx Based on the foregoing, this Office is of the opinion as it hereby holds that honoraria is considered compensation income. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV OIC, Asst. Commissioner (Legal Service)