Subsistence Allowance to Hospital Personnel Worth P6.00 Per Meal Need Not be Included as Compensation Subject to Withholding Tax

May 31, 1991 BIR RULING NO. 095-91 29 065-90 095-91 Gentlemen : This refers to your letter dated January 31, 1991 stating that the Pang-alaalang Pagamutan Dr. Jose Fabella grants a subsistence allowance to the hospital personnel; and that said subsistence allowance is in kind but since the hospital mess hall is inadequate to accommodate all personnel, then it was computed at the rate of P6.00 per meal for each employee, as per E.O. No. 346 and NOC No. 55. Based on the foregoing, you request for a ruling that the said subsistence allowance be excluded from gross compensation income. In reply, please be informed that pursuant to Section 2 (a) of Revenue Regulations No. 6-82 as amended by Rev. Reg. No. 12-86 implementing Section 28 of the Tax Code, as amended by Executive Order No. 37, " facilities or privileges (such as entertainment medical services, or so called courtesy discounts on purchases" furnished or offered by an employer to his employees generally, are not considered compensation subject to withholding if such facilities or privileges are of relatively small value and are offered or furnished by the employer merely as a means of promoting the health, goodwill, contentment or efficiency of his employees." Such being the case, the subsistence allowance worth P6.00 per meal need not be included as compensation subject to withholding tax since the same is of relatively small value and offered by the employer to promote goodwill, contentment and efficiency of its employees (Rev. Reg. 6-82 as amended by Rev. Reg. No. 12-86). cdta Very truly yours, (SGD.) JOSE U. ONG Commissioner