Amendments to Revenue Regulations No. 1-68 or the Private Retirement Benefit Plan Regulations

October 28, 1982 REVENUE REGULATIONS NO. 01-83 SUBJECT : Amendments to Revenue Regulations No. 1-68 or the Private Retirement Benefit Plan Regulations TO : All Internal Revenue Officers and Others Concerned Pursuant to Section 326 in relation to Section 4, both of the National Internal Revenue Code, as amended, the following regulations, amending Revenue Regulations No. 1-68, are hereby promulgated. acd 1 . Section 6 of Revenue Regulations No. 1-68 hereby amended to read as follows: "Sec. 6. Determination of qualification . (A) Issuance of certificate of qualification . Before availing of the privileges afforded by pension, gratuity, profit-sharing, or stock bonus plans, a certificate must be secured by the employer to the effect that the qualification of the plan for tax-exemption has been determined. In securing such certification, the employer must file a written application therefor with the Commissioner of Internal Revenue, attaching thereto the following documents: acd "(1) In the case of a trusteed Plan . - "(a) B.I.R. Form No. 17.60 duly accomplished; "(b) A copy of the written program constituting the Plan; "(c) A copy of the Trust Agreement executed by and between the employer as trustor and the trustee/trustees of the employees retirement trust fund, duly signed by the parties to the trust and acceptance by the trustee/trustees indicated; "(d) Statement of Actuarial Assumption or Valuation duly certified to by an independent consulting actuary who must be a Fellow of the Actuarial Society of the Philippines (in the case of a fixed-benefit type of Plan); and "(e) Such other documents which the Commissioner may consider necessary in the final determination of the qualification of the P lan for tax-exemption under Republic Act No. 491 7 (n ow Section 2 9(c)(7)(A) of the Tax Code and these regulations. (2) In the case of a non-trusteed/insured Plan . "(a) B.I. R. Form No. 17.60 duly accomplished; "(b) A copy of the written program constituting the Plan; "(c) A copy of the Deposit Administration Contract Deferred Annuity Contract executed by and between the employer or the insured or policyholder and the Insurance Company as the insurer; and "(d) Such other documents which the Commissioner may consider necessary in the final determination of the publication of the Plan for tax-exemption. acd (3) In the case of Multi-employer Plans . "The same documentation requirements as in paragraph (A)(1) or paragraph (A)(2), as the case may be, this Section should be submitted for each of the participating employers together with the Participating Agreement. "Upon receipt of the application, the same together with the supporting documents shall be referred to the Government and Tax Exempt Corporation Division for field investigation and verification of the employee's trust's (Retirement Plan) compliance with the requirements provided for by Section 29(c)(7)(A) of the Tax Code and these regulations, after which the Commissioner of Internal Revenue shall decide whether or not the plan is so qualified. If the Commissioner decides that the plan is qualified, he shall issue a certificate of qualification, upon payment of the corresponding fee prescribed in paragraph (B) of this Section. However, if he decides that the Plan is not qualified, he shall inform the employer of his decision and the reasons supporting the same. cd i "During the period that the Plan is in operation, amendments thereto may be introduced. Such amendments should also be submitted for certification that the amendment or amendments do not affect the qualification of the Plan. If found to be beneficial to the employee-members of the Plan, an amendatory certification of qualification shall be issued by the Commissioner of Internal Revenue, upon payment of the corresponding fee prescribed in paragraph (B) of this section. Fees to be paid by the employer : "1. Upon issuance of the certificate of qualification - "(a) employers not having more than 50 employers P250 "(b) employers having more than 50 but not over 100 employees P350 "(c) employers having more than 100 employees P500 "2. Upon issuance of an amendatory certificate of qualification - "(a) employers not having more than 50 employees P200 "(b) employers having more than 50 but not over 100 employees P300 "(c) employers having more than 100 employees P450 " Provided, however , that employers not having more than five (5) employees shall be exempt from the fees prescribed by these regulations. cd "Said fees shall accrue to the General Fund and shall be deposited with the National Treasury." SECTION 2 . Revenue Regulations No. 1-68 is hereby amended by adding a new section to be known as Section 7, and to read as follows: "Sec. 7. Filing and examination of annual information return . When a certificate of qualification is issued by the Commissioner of Internal Revenue, the employees' (trusteed Retirement Plan) trust need not thereafter make and file a return of its income. However, the trustees or fiduciaries of qualified (trusteed) Retirement Plan should file on or before April 15 of each year, with the Government and Tax Exemption Corporation Division of the Bureau of Internal Revenue, an annual information return (B.I.R. Form No. ___ ) under oath, stating its gross income or total amount in the trust fund; total employer's contributions for past and current service liabilities; total employees' contributions, if any; earnings/yield from investments of the fund, nature of investment/investments, name and address of Bank or Investment House, expenses incurred; and payments of benefits under the Plan during the preceding year, together with a certification showing whether or not there is any amendment or modification in the Plan rules and regulations, Trust Agreement Actuarial valuation or assumptions, funding, Collective Bargaining Agreement, if any, manner of operation and activities as well as sources and disposition of the trust fund. "The annual information return shall be examined by examiner, of the Government and Tax Exempt Corporation Division and the report of examination shall be processed as in the case of a regular return." SECTION 3 . Section 7 of the Revenue Regulations No. 1-68 hereby renumbered as Section 8 and amended to read as follows: cdt "Sec. 8. Coverage of the exemption . Republic Act No. 4917 (now Section 29(c)(7)(A) of the Tax Code) took effect on June 17, 1967. Employees retiring after this date under a benefit plan established prior to said date but which qualifies as herein provided shall be entitled to exemption. Such plan must, however, be submitted for determination of its qualification as provided for in Section 6 of these regulations. "Exemption shall also apply to employees involuntarily separated from the services of their employers after said date. "Tax-exemption privileges under a qualified Retirement Plan shall retroact to the date of effectivity of the Plan." SECTION 4 . Revenue Regulations No. 1-68 is hereby amended by adding a new section to be known as Section 9, to read as follows: "Sec. 9. Penalty Provision . By virtue of Section 337 of the National Internal Revenue Code, any person required to make an annual information return or to supply information required under these regulations who fails to make such return or to supply such information at the time specified therein shall be liable to a fine of not more than three hundred pesos or imprisonment for not more than six months, or both." SECTION 5 . Effectivity . These regulations shall take effect thirty (30) days after their publication in newspapers of general circulation in the Philippines. (SGD.) CESAR VIRATA Minister of Finance Recommended by: (SGD.) RUBEN B. ANCHETA Acting Commissioner