Exemption of Terminal Leave Pay from Withholding Tax Applies Only to Members of the Judiciary who Retired

September 10, 1991 BIR RULING NO. 180-91 Sec. 28 (b) 102-91 180-91 S i r : This refers to your letter dated January 3 and November 15, 1990 requesting authority for the Coca Cola Export Corporation to reimburse you of the income tax withheld by said company on your accumulated leaves based on a Supreme Court decision. In reply, please be informed that in reiterating the exemption from the withholding tax of the terminal leave pay of its retiree-employee, Atty. Bernardo F. Zialcita, the Supreme Court, in another En Banc Resolution dated October 18, 1990, denying the motion for clarification and/or reconsideration of the Bureau of Internal Revenue, specifically stated that the August 23, 1990 resolution (Admin. Matter No. 90-6-015-SC) exempting terminal leave pay from withholding tax " applied only to employees and officers of the judiciary who retire, resign or are separated through no fault of their own." (Emphasis supplied) In view of the foregoing, this Office is of the opinion as it hereby holds that until the Supreme Court rules otherwise, the terminal leave pay you received from the Coca Cola Export Corporation remains subject to the withholding tax considering that you are not a retired employee of the Judiciary. Accordingly, your request for authority cannot be granted. cdtech Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner Officer-in-Charge