BIR Ruling No. 215-83

December 6, 1983 BIR RULING NO. 215-83 S i r : This refers to your letter dated October 7, 1983 requesting a ruling as to whether the incentive in the form of a deduction of an investment allowance from taxable income not exceeding 10% thereof provided for under Article 46 (c) of P.D. No. 1789 as amended by B.P. Blg. 391 can be availed of even by investors who are fixed income earners. In reply, please be informed that Section 16 of B.P. Blg. 135 is explicit that incentives granted under P.D. No. 1789 shall not be effected by the amendatory provisions of B.P. Blg. 135. The investment allowance provisions under P.D. No. 1789 as amended by B.P. Blg. 391 which is a later do not qualify with respect to investors who are entitled to the said tax incentives. Accordingly, the tax allowance for investment granted under Article 46 (c) of P.D. No. 1789 as amended by B.P. Blg. 391 (effective April 14, 1983), pertinent portion of which is quoted hereunder as follows: "Art. 46. The following incentive may be granted to certain registered enterprise and investors : xxx xxx xxx "(c) Special Incentive for Investment in National Development Fund . If an investment is made in national development fund certificates issued under Executive Order No. 842, in lieu of direct investment in registered pioneer enterprises as provided in subparagraph (a) of Article 44 of this Code, an investment allowance shall be allowed from taxable income, but not to exceed ten (10%) percent thereof ." xxx xxx xxx (emphasis ours) shall be allowed as deduction from the taxable income of individual investors in National Development Fund Certificates (NDF Certificates) issued under Executive Order No. 842, regardless of whether their sources of income are fixed, or form employment, from business or exercise of profession. In other words, while taxable compensation income is defined under Section 28 (a) of the Tax Code as amended by B.P. Blg. 135, as gross compensation income less personal and additional exemptions only, the tax allowance for investment granted under Article 46 (c) of P.D. No. 1789 as amended by B.P. Blg. 391 shall nevertheless be allowed as deduction from the taxable income of an individual investor in NDF certificates who is a fixed or compensation income earner, in an amount not exceeding 10% of such taxable income. cdtech Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue