Withholding Tax on Retirement Fees Paid by Koppel (Philippines), Inc., to Its Employees

February 6, 1958 BIR RULING NO. 084-58 Messrs. Sycip, Gorres, Velayo & Co. Certified Public Accountants 490 San Luis, Manila Gentlemen : With reference to your letter dated February 5, 1958, requesting the opinion of this Office on whether or not retirement pay which your client, Koppel (Philippines), Inc., will pay to several of its employees who are to be retired either because they have reached retirement age or due to sickness, is subject to the withholding tax on wage, I have the honor to inform you in the affirmative it appearing that said retirement pay is given as compensation for services rendered. Retired pay are considered wages within the meaning of the withholding tax law if paid as compensation for services performed by the employee for his employer, in accordance with Section 2(a) of Revenue Regulations No. V-8-A. As such, retired pay is subject to withholding. (Section 2(b), Revenue Regulations No. V-8-A). aisadc Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue