Tax Treatment of the Monetary Sum Representing Atonement from the Japanese People to Former Wartime Comfort Women

September 5, 1996 REVENUE MEMORANDUM CIRCULAR NO. 41-96 SUBJECT : Tax Treatment of the Monetary Sum Representing Atonement from the Japanese People to Former Wartime Comfort Women TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, quoted hereunder is the letter reply of the Secretary of Finance, Honorable Roberto F. de Ocampo dated August 15, 1996: "Minister Makoto Katsura Embassy of Japan 375 G.Puyat Avenue Makati City Dear Minister Katsura, This refers to your request to exempt the monetary sum representing atonement from the Japanese people to former wartime comfort women from the individual income tax and the donor's tax. Under our income tax laws, specifically, Sec. 28(b) 7 (C) of the National Internal Revenue Code, "social security benefits, pensions, and other similar benefits received by resident from foreign government" are excluded from the purview of gross income which is subject to income tax. Sec. 28(b)(6) also excludes "amounts of any damages received whether by suit or agreement on account of injuries or sickness" from taxable income. These provisions can be used to provide tax exemption for the reparation payments. Very truly yours, (SGD) ROBERTO F. DE OCAMPO Secretary" It is desired that this circular be given as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue