Request for Refund of Overpayment of Income Tax Resulting from the Inclusion of RATA in the Computation of Income Tax

January 27, 1992 BIR RULING NO. 040-92 221 240-91 040-92 Mr. Manuel C. Velasquez Philippine Senate Old Congress Taft Avenue, Manila S i r : This refers to your letter dated 12 November 1991 requesting refund in the amount of P8,074.00 representing overpayment of income tax resulting from the inclusion of RATA in the computation of income tax for taxable year 1989. In reply, please be informed that this Office has issued Revenue Memorandum Circular No. 60-91 dated July 9, 1991 clarifying that BIR Ruling No. 21(a) 000-00-062-91 dated November 4, 1991 holding that RATA is in effect a reimbursement for the expenses incurred in the performance of one's duties rather than as an additional compensation and therefore is not compensation subject to withholding tax, shall be applicable beginning taxable year 1991. Any amount of tax withheld from RATA received by qualified officials and employees from January 1, 1991 shall not be refunded, but shall be credited against their income tax due when the annualized withholding tax is determined as of the year end 1991. Based on the foregoing, your request for refund of the overpayment of income tax has to be, as it is hereby denied for lack of legal basis. aisadc Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue