Withholding Tax — Money Value of Accumulated Vacation and Sick Leave Credits
BIR Ruling No. 046-79 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Jun 21, 1979
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June 21, 1979 BIR RULING NO. 046-79 Withholding tax money value of accumulated vacation and sick leave credits This refers to your letter dated January 23, 1979 requesting clarification on whether the money value of the accumulated vacation and sick leave credits of retiring officials and employees is subject to the withholding tax provisions of Revenue Regulations No. 13-78 implementing Presidential Decree No. 1351. In reply, I have the honor to inform you that under the aforesaid Regulations, only income payment enumerated therein are subject to withholding tax. The commutation of the money value of vacation and sick leave credits of retiring officials and employees is not among these specified in the Regulations. Accordingly, the money value of the accumulated vacation and sick leave credits of retiring officials and employees is not subject to the withholding tax provisions of Revenue Regulations No. 13-78. However, as part of compensation for services rendered, the aforesaid money value of accumulated vacation and sick leave is subject to income tax and consequently to the withholding tax provisions of Chapter XI, Title II of the Tax Code as implemented by Revenue Regulation No. V-8 as amended by Revenue Regulations No. 9-75. aisa dc
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