BIR Ruling [DA-303-98]

July 3, 1998 BIR RULING [DA-303-98] University of the Philippines Office of Legal Services 3rd Floor, Quezon Hall Diliman, Quezon City Attention: Atty. Carmelita Yadao-Guno General Counsel and Corporate Secretary, U.P. Provident Fund Gentlemen : This refers to your letter dated May 8, 1998 requesting for confirmation of your opinion that the amendment of the rules and regulations of the University of the Philippines Provident Fund (UPPF) reducing the required number of years of service by the employees of the University from twenty (20) years to fifteen (15) years in order to be entitled to retirement benefits will not affect the tax exemption of the UPPF. It is represented that in BIR Ruling No. ERP255-97 dated July 14, 1997, this Office held that the UPPF is an employees' trust exempt from income tax under Section 53 (b) [now Section 60 (B) of the Tax Code of 1997]. Thus, the benefits to be received from the UPPF by the employee-members upon retirement, in addition to and as part of their retirement gratuity from U.P. shall be exempt from income tax. In reply, please be informed that since the aforesaid amendment to the UPPF is not prejudicial to the employee-members, it will not affect the Plan's qualification under then Section 53 (b) of the Tax Code of 1977 [now Section 60 (B) of the Tax Code of 1997], and, therefore, the benefits to be received from the UPPF by the employee-members upon retirement, in addition to and as part of their retirement gratuity from UP, shall be exempt from income tax. (BIR Ruling No. ERP255-97 dated July 14, 1997) IATSHE Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)