Exemption of Meal Coupons from Compensation Subject to Withholding Tax

November 7, 1988 BIR RULING NO. 529-88 28 000-00 529-88 Gentlemen : This refers to your letter dated August 17, 1988 requesting a ruling as to whether the following are not considered compensation income subject to withholding tax: "a. meal coupons worth P330.00 a month "b. subsidized cost of one sack of rice a month; each employee is charged of P25.00 per sack "c. uniforms of employees at an average of P2,000.00 for female and P1,000.00 for male once every two years "d. medical cash allowance for dependents of P1,500.00" In reply thereto, please be informed that the meal coupons worth P330.00 a month need not be included as compensation subject to withholding since they are given for the convenience of the employer. (Sec. 2, Revenue Regulations No. 6-82, as amended by Revenue Regulations No. 12-86; BIR Ruling No. 023-85) It is noted that as banking hours are continuous from 9:00 a.m. to 3:00 p.m., bank personnel are required to render service as may be necessary even during lunch break from 12:00 noon to 1:00 p.m. Likewise, the subsidized cost of one sack of rice a month need not be included as compensation subject to withholding. (BIR Ruling Nos. 217-87 and 348-87) However, uniforms of employees at an average of P2,000.00 for females and P1,000.00 for males once every two (2) years; and the medical cash allowance for dependents of P1,500.00 per annum given to employees are considered compensation income/wages subject to withholding. It is noted that under Section 2 of Revenue Regulations No. 6-82, as amended, only facilities or privileges which are of relatively small value are not considered as compensation subject to withholding. This is not so in the case of said uniforms and medical cash allowance. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner