Allowances, Bonuses and Traveling Expenses are Considered Taxable Income to the Recipients

December 1, 1966 BIR RULING NO. 066-66 Mr. Jesus M. Picazo 1537 Third Street Fabie Estate Subdivision Paco, Manila S i r : This refers to your letter dated September 21, 1966, requesting the opinion of this Office on the question of whether or not allowances, bonuses and traveling expenses are considered income of the recipients which should be reported in their income tax returns. In reply thereto, I have the honor to inform you that payment by an employer to an employee whether designated as compensation of otherwise intended to represent payment for services rendered in addition to the agreed compensation is taxable income to the recipient (par. 6.03 Law of Federal Income Taxation Vol. I) Bonuses, allowances for representation, house rental, and traveling expenses when paid for services actually rendered by the employees are considered as additional compensation that should be reported in the employees' income tax returns. They are at the same time allowable deduction from the gross income by the employers in accordance with Section 30 (a) (1) of the Tax Code. prcd Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue