Tax Exemption on the Housing Benefits Provided by an Employer

December 23, 1988 BIR RULING NO. 596-88 71 000-00 596-88 Gentlemen : This refers to your letter dated October 11, 1988 requesting in effect a ruling as to whether or not your president, as well as your faculty and staff would be liable to pay income tax on the housing benefits you are intending to provide aside from the salary and other benefits you are providing them at present. It is represented that you are a non-stock, non-profit religious Corporation which is exempt from the payment of income tax and the filing of the corresponding income tax return under Section 26 of the Tax Code, as amended; that in accordance with your by-laws you are training leaders for the Christian ministry; and that you are intending to provide housing benefits to your president, faculty and staff. In reply, please be informed that under Section 2(a) of Revenue Regulations No. 12-86 amending Revenue Regulations No. 6-82 implementing Section 71, Chapter X, Title II of the Tax Code, as amended by Batas Pambansa Blg. 135, for purposes of withholding tax, the term "Compensation" means all remuneration for services performed by an employee for his employer unless specifically excepted under Sections 27, 28 and 71 of the National Internal Revenue Code. Accordingly, the name by which remuneration for services is designated in immaterial. Thus, salaries, wages, emoluments and honoraria, bonuses, allowances (such as transportation, representation, entertainment and the like), fringe benefits (monetary and non-monetary), fees, including directors fees, taxable pensions and retirement pay, and other income of a similar nature constitute compensation income which necessarily includes housing benefits being furnished by an employer to his employees for services rendered. Moreover, if a person received as remuneration for services rendered a salary and in addition thereto living quarters or meals, the value to such person of the quarters and meals so furnished shall be added to the remuneration otherwise paid for the purpose of determining the amount of compensation subject to withholding. Your query is answered, therefore, in the affirmative. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner