Whether the Educational Assistance of P6,500.00 Given to Employees Once a Year is Considered "other benefits", Therefore, Exempted/Excluded from Taxation and Consequently from the Withholding Tax

September 6, 1995 BIR RULING NO. 135-95 28 (b) (8) 000-00 135-95 Rightpak International Corporation Canlubang Industrial Estate Laguna Attention: Atty . Antonio B . Sta . Romana Legal Counsel Gentlemen : This refers to your letter dated May 31, 1995 requesting for confirmation of your opinion to the effect that the educational assistance of P6,500.00 given to your employees once a year is considered "other benefits", therefore, exempted/excluded from taxation and consequently from the withholding tax. It is represented that every May 30 of each year, Rightpak International Corporation (RIC) gives P6,500.00 to each employee for educational assistance as a bonus for incentive and morale upliftment to its employees. The Collective Bargaining Agreement between RIC and its labor force provides for said educational assistance. In reply therefore, please be informed that under Section 28(b) (8) of the Tax Code, as amended by R.A. No. 7833, other benefits such as productivity incentive and Christmas bonus in an amount not exceeding twelve thousand pesos (P12,000.00) which shall be integrated in the 13th month pay is excluded from the computation of gross compensation income. Such being the case, the amount P6,500.00 educational assistance may form part of "other benefits" of the employees provided it is within the limitation of P12,000.00 for other benefits and within the total of P30.000.00 inclusive of the 13th month pay. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. cdt Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue