Retirement Benefits Subject to Income Tax

June 28, 1968 BIR RULING NO. 010-68 Mr. Luis E. San Juan P. O. Box 2624 M a n i l a S i r : This refers to your letter dated February 14, 1968 where you posed the following query: casia "I am seeking your opinion as to whether I am entitled to the benefits of R.A. 4917 exempting retired employees of private firms from the payment of income tax. "For your information, I am a retired employee of the Philippine Refining Company, Inc. since the year 1953, and have been receiving a life pension from that Company through the Lincoln Life Insurance Co., Messrs. Theo Davies & Co., Ltd., Agents, in Manila, who pay my pension to me in monthly installments." In reply, I have the honor to inform you that inasmuch as you are already a retired employee before the enactment of R.A. 4917, you cannot avail of the exemption provisions of said law. This is for the reason that laws, as a rule, unless the contrary is expressed, have prospective application only. You are, therefore, subject to income tax on the retirement benefits you received either before or after the enactment of the law. Besides even if you retired after June 17, 1967, the exemption of your retirement benefits can only be determined after your employer shall have submitted to this Office its retirement plan and the same is found to be reasonable. prcd Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue