BIR Ruling No. 143-96

December 24, 1996 BIR RULING NO. 143-96 28 (b) (8) 000-00 143-96 The Regional Director Revenue Region No. 12 Bacolod City M a d a m : This refers to your letter dated April 8, 1996 requesting for a ruling as to whether the following remunerations received by military personnel shall be considered "other benefits" which shall be excluded/exempted from the gross compensation income, viz: LLphil 1. Subsistence Allowance 2. Clothing allowance 3. Quarters allowance 4. Hazard Pay 5. Cost of Living Allowance or COLA (different from PERA) 6. Additional Compensation Allowance or ACA 7. Longevity Pay 8. Loyalty Pay In reply, please be informed that pursuant to paragraph 2, Section 2 of Revenue Regulations No. 12-86, all remunerations for services are generally included in the taxable compensation income of AFP personnel subject to withholding tax. It includes fringe benefits (monetary or non-monetary) e.g., longevity pay, hazard pay and all kinds of allowances except allowances for quarters., clothing and subsistence which are held to be exempt from income tax, pursuant to RMC No. 15-87. (BIR Ruling No. 027-90) Accordingly, hazard pay, COLA, ACA, longevity pay and loyalty pay shall not be excluded/ exempted from the gross compensation income as provided for under paragraph (F), Section 28 (b) (8) of the Tax Code, as amended by R.A. No. 7833. Conversely, they should not be included for purposes of determining whether or not the "other benefits" exceeds P12,000.00. casia Please be guided accordingly. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue