All Benefits Granted by the GSIS Not Taxable; Taxability of Pensions Received from the U.S. Government and Corporations

November 13, 1968 BIR RULING NO. 032-68 Mr. Nestorio M. Rubio c/o Bureau of Public Schools Division of Bohol Guindulman, Bohol S i r : This refers to your letter of May 31, 1968 wherein you posed the following queries: cdt "1. Are the proceeds (gratuity) a teacher gets upon retirement under RA 1616 and the amount he receives from the retirement fund subject to tax? "2. Is each of the following taxable? (a) Annuities received by a retired teacher from the GSIS. (b) Monthly pensions from the SSS. (c) Pensions received by Filipinos from U.S. private corporations or the U.S. government." In reply, I have the honor to inform you that pursuant to Section 28(c) of Commonwealth Act No. 186, as amended, all benefits granted by the Government Service Insurance System shall be exempt from all types of taxes. Accordingly, annuities and gratuity benefits received by a member of the System under CA 186, as amended by Republic Act No. 1616 are not subject to tax. Likewise, monthly pensions received by a member of the Social Security System are exempt from income tax pursuant to Section 17 of Republic Act No. 1161, otherwise known as "The Social Security Act of 1954", as amended. Generally, pensions received by Filipinos from the U.S. Government and U.S. private corporations are subject to Philippine taxes unless the taxpayer claiming exemption from such taxes can justify his claim by the clearest grant of statute or organic law. (See Asiatic Petroleum Co. vs. Llanes, 49, Phil. 466; House vs. Posadas, 53 Phil. 338; CIR vs. Manila Jockey Club, Inc., G.R. No. L-8755, March 23, 1956). cdta Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue