BIR Ruling No. 029-61

February 2, 1961 BIR RULING NO. 029-61 Dodwell & Co., Ltd. 290 Atlanta St., Port Area Manila Gentlemen : In reply to the query contained in your letter dated January 26, 1961, I have the honor to inform you that pensions and retired pay are wages subject to withholding if paid as compensation for services performed by the employee for his employer, pursuant to Section 2(a) and (b) of Revenue Regulations No. V-8, as amended. As to the manner of computing the withholding tax on retirement pension received during the year, this Office has ruled that "the amount of retirement pay and the salaries earned during the year (prior to retirement) may be averaged over a period covering one calendar year. This is, the retirement pay plus the salaries received prior to retirement should be averaged over the number of payroll periods covering the whole taxable year, without excluding the number of payroll periods from the beginning of the taxable year to the payments of the retirement pay." aisadc Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue