BIR Ruling No. 034-62

January 30, 1962 BIR RULING NO. 034-62 Mr. Pablo F. Melena Suite 710, Bank of PI Building Plaza Cervantes, Manila S i r : This has reference to your letter dated September 29, 1961 requesting the opinion of this Office as to whether or not the semi-monthly allowance of P300.00 given to an officer of a corporation and charged to "representation and transportation" is subject to the withholding tax on wages. For your information and guidance, there is quoted below pertinent parties of section 2(c) of Revenue Regulations No. V-8, as amended: "(c) Travelling and other expense . Amounts paid specifically either as advances or reimbursements for traveling or other bona fide ordinary and necessary expenses incurred or reasonably expected to be incurred in the business of the employer are not wages and are not subject to withholding . Traveling and other reimbursed expenses must be identified either by making a separate payment or by specifically indicating the separate amounts where both wages and expense allowances are combined in a single payment." Under the aforequoted provisions of the Regulations, fixed lump sum allowance in the form of "representation and transportation" given to an officer of a corporation are not considered wages, hence, not subject to the withholding tax on wages if they are ordinary and necessary expenses reasonably expected to be incurred in the business of the employer and they are properly accounted for and specifically identified as such in the books of accounts of the corporation. Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue