Tax Consequence of the Withdrawal of Employees' Contributions to University Physicians' Services, Inc. Retirement Plan Fund

January 8, 1986 BIR RULING NO. 004-86 29 (c) 7 (A) 000-00 004-86 Gentlemen : This refers to your letter dated September 16, 1985 requesting a ruling as to the tax consequence of the withdrawal of the employees' contributions to the University Physicians' Services, Inc. Retirement Plan fund, the same having been discontinued due to the compulsory coverage of your employees under the Pag-ibig Program of the government. In reply thereto, I have the honor to inform you that the employees' contributions together with the earnings thereof can be returned to the employees since the Plan has already been terminated. Any and all amounts which represent a return of personal contributions to the employee-members shall not be subject to tax. However, the earnings of the employee-members' personal contributions which will also be paid or returned to them shall be subject to the withholding tax on wages and are taxable to the recipient employee-member to the extent of the entire amount thereof in the year so distributed at the rates prescribed by Section 21(a) in relation to Section 91, Chapter XI, Title II of the Tax Code, as amended by Batas Pambansa Blg. 135 and implemented by Revenue Regulations No. 6-82 dated October 1, 1982. (see BIR Ruling No. 21(a)-000-00-216-83 dated December 7, 1983) Moreover, any and all amounts which will be reverted to the company as a result of the termination of the Plan shall be subject to income tax. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner