BIR Ruling [DA-686-99]
BIR Ruling [DA-686-99] • Bureau of Internal Revenue (BIR) Issuances • Rulings (Unnumbered) • Dec 10, 1999
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December 10, 1999 BIR RULING [DA-686-99] Himlayang Pilipino, Incorporated 12/F Triumph Building 1610 Quezon Avenue, Quezon City Attention: Ms . Virginia I . Ong Executive Vice President Gentlemen : This refers to your letter dated February 26, 1999 requesting for a ruling that the payment of retirement benefits to your employees in accordance with the provisions of RA 7641 are exempt from income tax and consequently from withholding tax. prcd It is represented that your company has no BIR-approved Retirement Plan; and that your company pays retirement benefits to retiring employees in accordance with the following: month salary 15 days Five (5) days incentive leave 5 days One over twelve (1/12) 13th month pay 2.5 days 22.5 days In reply, please be informed that pursuant to Section 32(B)(6)(a) of the Tax Code of 1997 retirement benefits received under Republic Act No. 7641 shall not be included in gross income and shall be exempt from income tax. Accordingly, retirement benefits to be paid by you to your retiring employees under RA 7641 are not subject to income tax and consequently to the withholding tax prescribed under Section 79, Chapter XIII, Title II of the Tax Code of 1997. (BIR Ruling No. 50-98 dated April 27, 1998) Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue
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