Tax Exemption Under Republic Act No. 4917 Applies to the Retirement Benefits Received by Officials and Employees in the Philippines

December 16, 1981 BIR RULING NO. 273-81 029-b 000-00 273-81 Caltex Oceanic Limited P.O. Box 783, Manila Attention: Mr . Masarrat Husain Authorized Representative Gentlemen : This refers to your letter dated September 14, 1981 stating that Caltex Oceanic Limited, a company registered in the Bahama Islands, referred to as the Principal Company, has established a Regional Office in the Philippines under Registration No. 282 dated December 2, 1980; that said Regional Office does not derive any income from sources within the Philippines; that the U.K. expatriate employees (112 members) of the Principal Company, who do not derive income from sources within the Philippines are covered by the Caltex Pension Plan established by said Principal Company in the United Kingdom in 1951; and that in accordance with Section 19(a) of P.D. 1752, you are in the process of filing an application with Home Development Mutual Fund for the grant of waiver from the coverage of said Decree. You now request this Office to issue a certificate of qualification of the said Caltex Pension Plan pursuant to Republic Act No. 4917. In reply, please be informed that Republic Act No. 4917 [now Section 29(b) (7) (A), Tax Code] providing tax exemption of retirement benefits, applies to retirement benefits received by officials and employees of private firms in the Philippines in accordance with a reasonable private retirement plan. Such being the case, the Caltex Pension Plan does not come within the purview of Republic Act No. 4917 since said plan covers officials and employees of a foreign firm. Hence, this Office cannot make a determination of qualification of the Plan under said law. Very truly yours, RUBEN B. ANCHETA Acting Commissioner