Applicability of the Expanded Withholding Tax on Monetary Award

January 29, 1981 BIR RULING NO. 020-81 053-f 000-79 020-81 Air Line Pilots Association of the Philippines Andrews Avenue, Nichols Field Pasay City, Metro Manila Attention: Mr . Ricardo T . Singson President Gentlemen : This refers to your letter dated July 31, 1980, requesting a ruling on the applicability of the expanded withholding tax on monetary award given through a court order. Under Section 1(f) of Revenue Regulations No. 6-79, awards and prizes in the amount of or with a cash value exceeding three thousand pesos (P3,000.00) are subject to the expanded withholding tax. The phrase "awards and prizes" as contemplated in the said Revenue Regulations means something offered or striven for or won in a contest of skill or chance wherein the taxpayer-recipient actively participated without investing and/or risking money or other stakes towards its outcome. In view thereof, the monetary award ordered by the Court of First Instance of Manila to be given to Elfren Abad Santos, by virtue of a claim for Loss of License Insurance is not subject to the withholding tax as provided for under Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79, implementing Presidential Decree No. 1351. With respect to the legal interest thereto, the same is not covered inasmuch as it is not one of those specified in the aforementioned Regulations. cdta Very truly yours, RUBEN B. ANCHETA Acting Commissioner