Revenue Etc for Income Taxation

7/21/2019 Revenue Etc for Income Taxation

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REVENUE REGULATIONS NO. 02-98

SUBJECT : Implementing Rep!li" A"t N#. 8$2$ % &An A"t Amen'ing T(eN)ti#n)l Inte*n)l Re+ene C#'e% ), Amen'e'& Rel)ti+e t# t(e it((#l'ing #n In"#meS!e"t t# t(e E/p)n'e' it((#l'ing T)/ )n' in)l it((#l'ing T)/% it((#l'ing #1In"#me T)/ #n C#mpen,)ti#n% it((#l'ing #1 C*e'it)!le V)le-A''e' T)/ )n' Ot(e*e*"ent)ge T)/e,

TO : All Internal Revenue Ofcers and Others Concerned

Pursuant to Sec. 244 o the National Internal Revenue Code, as aended, in relation to Sections!" to !# , Sections "$ to $% , Section &&4'C( and Sections &&) to &2" o Re*u+lic Act $424,these reulations are here+- *roulated hich shall overn the collection at source on incoe*aid on or ater /anuar- &, #$ and *rescri+in the Revised 0ithholdin Ta1 Ta+les onco*ensation.

SCTION 2.!". 0ithholdin o Ta1 at Source

'A( 3inal 0ithholdin Ta1. 5nder the 6nal ithholdin ta1 s-ste the aount o incoe ta1ithheld +- the ithholdin aent is constituted as a ull and 6nal *a-ent o the incoe ta1 duero the *a-ee on the said incoe. The lia+ilit- or *a-ent o the ta1 rests *riaril- on the*a-or as a ithholdin aent. Thus, in case o his ailure to ithhold the ta1 or in case o underithholdin, the de6cienc- ta1 shall +e collected ro the *a-or7ithholdin aent. The *a-ee is

not re8uired to 6le an incoe ta1 return or the *articular incoe. 99*rThe 6nalit- o the ithholdin ta1 is liited onl- to the *a-ees incoe ta1 lia+ilit- on the*articular incoe. It does not e1tend to the *a-ees other ta1 lia+ilit- on said incoe, such ashen the said incoe is urther su+;ect to a *ercentae ta1. 3or e1a*le, i a +an< receivesincoe su+;ect to 6nal ithholdin ta1, the sae shall +e su+;ect to a *ercentae ta1. cdasia

'=( Credita+le 0ithholdin Ta1. 5nder the credita+le ithholdin ta1 s-ste, ta1es ithheldon certain incoe *a-ents are intended to e8ual or at least a**ro1iate the ta1 due o the*a-ee on said incoe. The incoe reci*ient is still re8uired to 6le an incoe ta1 return, as*rescri+ed in Sec. !& and Sec. !2 o the NIRC , as aended, to re*ort the incoe and7or *a- thedi>erence +eteen the ta1 ithheld and the ta1 due on the incoe. Ta1es ithheld on incoe*a-ents covered +- the e1*anded ithholdin ta1 'reerred to in Sec. 2.!".2 o thesereulations( and co*ensation incoe 'reerred to in Sec. 2."$ also o these reulations( are

credita+le in nature.SCTION 2.!".&. Incoe Pa-ents Su+;ect to 3inal 0ithholdin Ta1. The olloin ors oincoe shall +e su+;ect to 6nal ithholdin ta1 at the rates herein s*eci6ed?

'A( Incoe *a-ents to a citi@en or to a resident alien individual?

'&( Interest ro an- *eso +an< de*osit, and -ield or another onetar- +ene6t ro de*ositsu+stitutes and ro trust unds and siilar arraneents? ro-alties 'e1ce*t on +oo


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Eoldin Period Rate

3our '4( -ears to less than 6ve '!( -ears !B

Three '%( -ears to less than our '4( -ears &2B

9ess than three '%( -ears 2B

'!( Cash and7or *ro*ert- dividends actuall- or constructivel- received ro a doesticcor*oration, ;oint stoc< co*an-, insurance or utual und co*anies or on the share o anindividual *artner in the distri+uta+le net incoe ater ta1 o a *artnershi* 'e1ce*t eneral*roessional *artnershi*( or on the share o an individual in the net incoe ater ta1 o anassociation, a ;oint account or a ;oint venture or consortiu o hich he is a e+er or a coDventurer.

)B D +einnin /anuar- &, #$

$B D +einnin /anuar- &, ## and

&B D +einnin /anuar- &, 2 and thereater

The ta1 on cash and *ro*ert- dividends shall onl- +e i*osed on dividends hich are declaredro *ro6ts o cor*orations ade ater ece+er %&, #". *r99

')( On ca*ital ains *resued to have +een reali@ed ro the sale, e1chane or other

dis*osition o real *ro*ert- located in the Phili**ines, classi6ed as ca*ital assets, includin *actode retro sales and other ors o conditional sales +ased on the ross sellin *rice or air ar


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*rescri+ed to +e deducted and ithheld ro the *roceeds thereo +ased on the lenth o tiethat the instruent as held +- the ta1*a-er

Eoldin Period Rate

3our '4( -ears to less than 6ve '!( -ears !B

Three '%( -ears to less than our '4( -ears &2B

9ess than three '%( -ears 2B

'%( On ca*ital ains *resued to have +een reali@ed ro the sale e1chane or otherdis*osition o real *ro*ert- located in the Phili**ines, classi6ed as ca*ital assets, includin *actode retro sales and other ors o conditional sales +ased on the ross sellin *rice or air ar


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'( Incoe erived +- Alien Individuals *lo-ed +- O>shore =an


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@ones such as Su+ic =a- Fetro*olitan Authorit- 'S=FA( and Clar< evelo*ent Authorit- 'CA( 3iteen *ercent '&!B(.

Interests, dividends, rents, ro-alties 'includin reunerations or technical services(, salaries,aes, *reius, annuities, eoluents or other 61ed or deterina+le annual *eriodic orcasual ains, *ro6ts, incoe and ca*ital ains received +- a orein cor*oration durin eachta1a+le -ear ro all sources ithin the Phili**ines shall not +e considered as +ranch *ro6tsunless the sae are e>ectivel- connected ith the conduct o its trade or +usiness in the

Phili**ines.'%( Interest on an- currenc- +an< de*osit and -ield or another onetar- +ene6t rode*osit su+stitutes and ro trust unds and siilar arraneents and ro-alties derived rosources ithin the Phili**ines Tent- *ercent '2B(.

'4( Interest incoe derived ro a e*ositor- =an< under the 1*anded 3orein Currenc-e*osit s-ste Seven and oneDhal *ercent '".!B(.

'!( Incoe derived +- a de*ositor- +an< under the e1*anded orein currenc- de*osit s-stero orein currenc- transactions ith local coercial +an


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'/( 3rine =ene6ts Hranted to the *lo-ee '1ce*t Ran< and 3ile *lo-ee( . There shall+e i*osed a 6nal ta1 o %4B +einnin /anuar- &, #$? %%B +einnin /anuar- &, ## and%2B +einnin /anuar- &, 2 and thereater, on the rossedDu* onetar- value o rine+ene6ts, ranted or urnished +- the e*lo-er to his e*lo-ees 'e1ce*t ran< and 6le as de6nedin the Code(. 3rine +ene6ts hoever, hich are re8uired +- the nature o or necessar- to thetrade, +usiness or *roession o the e*lo-er, or here such rine +ene6t is or the convenienceand advantae o the e*lo-er shall not +e su+;ect to the rine +ene6ts ta1. *rcd

The ter rine +ene6t eans an- ood, service or other +ene6t urnished or ranted in cash orin


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'2( Those iven to an inorer here the o>ender has o>ered to co*roise the violation ola coitted +- hi and his o>er has +een acce*ted +- the Coissioner and collected rothe o>ender.

The aount o reard shall +e e8uivalent to ten *ercent '&B( o the revenues, surchares orees recovered and7or 6ne or *enalt- i*osed and collected or one illion *esos 'P&,,.(*er case hichever is loer.

The reard shall +e *aid under the rules and reulations issued +- the Secretar- o 3inance, u*onthe recoendation o the Coissioner. Eoever, such *erson shall not +e entitled to areard, should no revenue, surchares or ees +e actuall- recovered or collected nor shall a**l-to a case alread- *endin or *reviousl- investiated or e1ained +- the Coissioner or an- ohis de*uties or aents or e1ainers, or the Secretar- o 3inance or an- o his de*uties or aents.

'%( Those iven to *ersons instruental in the discover- and sei@ure o such suled oods.

The aount o reard shall +e e8uivalent to ten *ercent o the ar


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'( Cineatora*hic 6l rentals and other *a-ents On ross *a-ents to residentindividuals and cor*orate cineatora*hic 6l oners, lessors or distri+utors 3ive *ercent'!B(.

'( Incoe *a-ents to certain contractors On ross *a-ents to the olloin contractors,hether individual or cor*orate One *ercent '&B(.

'&( Heneral enineerin contractors Those hose *rinci*al contractin +usiness inconnection ith 61ed or


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the *u+lication or *rintin o an- nes*a*er, aa@ine, revie or +ulletin hich a**ears atreular intervals, ith 61ed *rices or su+scri*tion and sale?

'( Fessenerial, ;anitorial, *rivate detective and7or securit- aencies, credit and7or collectionaencies and other +usiness aencies?

'h( Advertisin aencies, e1clusive o ross *a-ents to edia?

'i( Inde*endent *roducers o television, radio and stae *erorances or shos?

';( Inde*endent *roducers o G;inlesG?

'


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Real *ro*ert-, other than ca*ital asset, +- an individual, estate, trust, trust und or *ension undor +- a cor*oration ho is not ha+ituall- enaed in the real estate +usiness Seven and oneDhal *ercent '".!B(. 99*hil

Hross sellin *rice shall ean the consideration stated in the sales docuent or the air ar


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'A( In eneral, an- ;uridical *erson, hether or not enaed in trade or +usiness?

'=( An individual, ith res*ect to *a-ents ade in connection ith his trade or +usiness.Eoever, insoar as ta1a+le sale, e1chane or transer o real *ro*ert- is concerned, individual+u-ers ho are not enaed in trade or +usiness are also constituted as ithholdin aents?

'C( All overnent ofces includin overnentDoned or controlled cor*orations, as ell as*rovincial, cit- and unici*al overnents.

SCTION 2.!".4. Tie o 0ithholdin . The o+liation o the *a-or to deduct and ithholdthe ta1 under Section 2.!" o these reulations arises at the tie an incoe is *aid or *a-a+le,hichever coes 6rst, the ter G*a-a+leG reers to the date the o+liation +ecoe due,deanda+le or leall- enorcea+le.

SCTION 2.!".!. 1e*tion ro 0ithholdin. The ithholdin o credita+le ithholdinta1 *rescri+ed in these Reulations shall not a**l- to incoe *a-ents ade to the olloin:

'A( National overnent and its instruentalities, includin *rovincial, cit- or unici*alovernents?

'=( Persons en;o-in e1e*tion ro *a-ent o incoe ta1es *ursuant to the *rovisions oan- la, eneral or s*ecial, such as +ut not liited to the olloin:

'&( Sales o real *ro*ert- +- a cor*oration hich is reistered ith and certi6ed +- the

Eousin and 9and 5se Reulator- =oard 'E95R=( or E5CC as enaed in sociali@ed housin*ro;ect here the sellin *rice o the house and lot or onl- the lot does not e1ceed one hundredeiht- thousand *esos 'P&$,( in Fetro Fanila and other hihl- ur+ani@ed areas and onehundred 6t- thousand *esos 'P&!,( in other areas or such ad;usted aount o sellin *riceor sociali@ed housin as a- later +e deterined and ado*ted +- the E95R=, as *rovided underRe*u+lic Act No. "2"# and its i*leentin reulations?

'2( Cor*orations reistered ith the =oard o Investents and en;o-in e1e*tion ro theincoe ta1 *rovided +- Re*u+lic Act No. "#&) and the Oni+us Investent Code o $"?

'%( Cor*orations hich are e1e*t ro the incoe ta1 under Sec. % o the NIRC, to it: theHovernent Service Insurance S-ste 'HSIS(, the Social Securit- S-ste 'SSS(, the Phili**ineEealth Insurance Cor*oration 'PEIC(, the Phili**ine Charit- See*sta


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arraneents shall +e 6led and the *a-ent ade ithin tent- 6ve '2!( da-s ro the close oeach calendar 8uarter.

'=( 0ithholdin ta1 stateent or ta1es ithheld ver- *a-or re8uired to deduct andithhold ta1es under these reulations shall urnish each *a-ee, hether individual or cor*orate,ith a ithholdin ta1 stateent, usin the *rescri+ed or '=IR 3or 2%"( shoin the incoe*a-ents ade and the aount o ta1es ithheld therero, or ever- onth o the 8uarterithin tent- '2( da-s olloin the close o the ta1a+le 8uarter e*lo-ed +- the *a-ee in 6lin

his7its 8uarterl- incoe ta1 return. 5*on re8uest o the *a-ee, hoever, the *a-or ust urnishsuch stateent to the *a-ee siultaneousl- ith the incoe *a-ent. 3or 6nal ithholdinta1es, the stateent should +e iven to the *a-ee on or +eore /anuar- %& o the succeedin-ear. dctai

'C( Annual inoration return or incoe ta1 ithheld at source. The *a-or is re8uired to6le ith the Coissioner, Revenue Reional irector, Revenue istrict Ofcer, Collection Aentin the cit- or unici*alit- here the *a-or has his leal residence or *rinci*al *lace o +usiness,here the overnent ofce is located in the case o a overnent aenc-, on or +eore /anuar-%& o the olloin -ear in hich *a-ents ere ade, an Annual Inoration Return o Incoe

Ta1 0ithheld at Source '3or No. &)4(, shoin aon others the olloin inoration:

'&( Nae, address and ta1*a-ers, identi6cation nu+er 'TIN(? and

'2( Nature o incoe *a-ents, ross aount and aount o ta1 ithheld ro each *a-eeand such other inoration as a- +e re8uired +- the Coissioner.

I the *a-or is the Hovernent o the Phili**ines or an- *olitical su+division or aenc- thereo, oran- overnentDoned or controlled cor*oration, the return shall +e ade +- the ofcer ore*lo-ee havin control o the *a-ents or +- an- desinated ofcer or e*lo-ee.

SCTION 2.!$.&. Incoe o Reci*ient. Incoe u*on hich an- credita+le ta1 is re8uired to+e ithheld at source shall +e included in the return o its reci*ient. The e1cess o the ithheldta1 over the ta1 due on his return shall +e reunded to hi su+;ect to the authorit- o theCoissioner to reund ta1es under Sec. 24 o the NIRC. I the incoe ta1 collected at source isless than the ta1 due on his return, the di>erence shall +e *aid in accordance ith the *rovisionso Sec. !) o the Code.

The ta1es ithheld +- the ithholdin aents shall +e aintained in se*arate accounts and

should not +e coinled ith another unds o the ithholdin aent. The- shall +econsidered as a trust und held or overnent until the- are reitted.

SCTION 2.!$.2. Reistration ith the Reister o eeds. eeds o conve-ances o land orland and +uildin7i*roveent thereon arisin ro sales, +arters, or e1chanes su+;ect to thecredita+le e1*anded ithholdin ta1 shall not +e recorded +- the Reister o eeds unless theCoissioner or his dul- authori@ed re*resentative has certi6ed that such transers andconve-ances have +een re*orted and the e1*anded ithholdin ta1, inclusive o thedocuentar- sta* ta1, due thereon have +een ull- *aid, *ursuant to the *rovisions o Sections!" and ) o the Code , res*ectivel-.

The Reister o eeds shall annotate on the Transer Certi6cate o Title o the said *ro*ert- suchinoration re8uired under Section !$ '( o the Code. In case o an- violation o the saidre8uireent, he shall +e lia+le to the *enalties *rovided under Section 2)# o the said Code.

SCTION 2.!$.%. Clai or Ta1 Credit or Reund.

'A( The aount o credita+le ta1 ithheld shall +e alloed as a ta1 credit aainst the incoeta1 lia+ilit- o the *a-ee in the 8uarter o the ta1a+le -ear in hich incoe as earned orreceived.

'=( Clais or ta1 credit or reund o an- credita+le incoe ta1 hich as deducted andithheld on incoe *a-ents shall +e iven due course onl- hen it is shon that the incoe*a-ent has +een declared as *art o the ross incoe and the act o ithholdin is esta+lished+- a co*- o the ithholdin ta1 stateent dul- issued +- the *a-or to the *a-ee shoin theaount *aid and the aount o ta1 ithheld therero.


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Proo o reittance is the res*onsi+ilit- o the ithholdin aent.

'C( 1cess Credits An individual or cor*orate ta1*a-ers e1cess e1*anded ithholdin ta1credits or the ta1a+le 8uarter7-ear shall autoaticall- +e alloed as a credit aainst his incoeta1 due or the ta1a+le 8uarters7-ears iediatel- succeedin the ta1a+le 8uarters7-ears inhich the e1cess credit arose, *rovided he su+its ith his incoe ta1 return, a co*- o the 6rst*ae o his incoe ta1 return or the *revious ta1a+le *eriod shoin the aount o his e1cessithholdin ta1 credits, and on hich return he has not o*ted or a cash reund or ta1 credit

certi6cate. cdtai'&( I in lieu o the autoatic a**lication o his e1cess credit, the ta1*a-er ants a cash reundor a ta1 credit certi6cate or use in *a-ent o his other national internal revenue ta1 lia+ilities,he shall aerence +eteenthe correct aount and the aount o ta1 ithheld, includin the interest, incident to such error,and surchares, i a**lica+le, at the tie o the oriinal audit and investiation.


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SCTION 2.!$.). Ta1 Paid +- Reci*ient o Incoe. ver- *erson ho is re8uired to ithholdthe ta1 ro the co*ensation o an e*lo-ee is lia+le or the *a-ent o such ta1 to the =IR.Such lia+ilit- sta-s even i the e*lo-ee su+se8uentl- *a-s the ta1. The *a-ent o the ta1 +-the e*lo-ee does not relieve the e*lo-er ro the lia+ilit- or *enalties and7or additions to theta1 or ailure to deduct and ithhold ithin the tie *rescri+ed +- la or reulations. Thee*lo-er ill not +e relieved o his lia+ilit- or *a-ent o the ta1 re8uired to +e ithheld unlesshe can sho that the ta1 has +een *aid +- the e*lo-ee. The aount o an- ta1ithheld7collected +- the e*lo-er is a s*ecial und in trust or the overnent o thePhili**ines.

SCTION 2."$. 0ithholdin Ta1 on Co*ensation. The ithholdin o ta1 onco*ensation incoe is a ethod o collectin the incoe ta1 at source u*on recei*t o theincoe. It a**lies to all e*lo-ed individuals hether citi@ens or aliens, derivin incoe roco*ensation or services rendered in the Phili**ines. The e*lo-er is constituted as theithholdin aent.

SCTION 2."$.&. 0ithholdin o Incoe Ta1 on Co*ensation Incoe.

'A( Co*ensation Incoe e6ned. In eneral, the ter Gco*ensationG eans allreuneration or services *erored +- an e*lo-ee or his e*lo-er under an e*lo-erDe*lo-ee relationshi*, unless s*eci6call- e1cluded +- the Code.

The nae +- hich the reuneration or services is desinated is iaterial. Thus, salaries,aes, eoluents and honoraria, alloances, coissions 'e.. trans*ortation, re*resentation,entertainent and the liered +- an e*lo-er to his e*lo-ees enerall-, are not considered asco*ensation su+;ect to ithholdin i such acilities or *rivilees are o relativel- sall valueand are o>ered or urnished +- the e*lo-er erel- as a eans o *rootin the health,oodill, contentent, or efcienc- o his e*lo-ees.

0here co*ensation is *aid in *ro*ert- other than one-, the e*lo-er shall a


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*a-ent to the Coissioner.

'4( Ti*s and ratuities. Ti*s or ratuities *aid directl- to an e*lo-ee +- a custoer o thee*lo-er hich are not accounted or +- the e*lo-ee to the e*lo-er are considered asta1a+le incoe +ut not su+;ect to ithholdin.

'!( Pensions, retireent and se*aration *a-. Pensions, retireent and se*aration *a-constitute co*ensation su+;ect to ithholdin, e1ce*t those *rovided under Su+section = o thissection.

')( 3i1ed or varia+le trans*ortation, re*resentation and other alloances

'a( IN HNRA9, 61ed or varia+le trans*ortation, re*resentation and other alloances hichare received +- a *u+lic ofcer or e*lo-ee or ofcer or e*lo-ee o a *rivate entit-, in additionto the reular co*ensation 61ed or his *osition or ofce, is co*ensation su+;ect toithholdin.

'+( An- aount *aid s*eci6call-, either as advances or rei+urseents or travellin,re*resentation and other +ona6de ordinar- and necessar- e1*enses incurred or reasona+l-e1*ected to +e incurred +- the e*lo-ee in the *erorance o his duties are not co*ensationsu+;ect to ithholdin, i the olloin conditions are satis6ed:

'i( It is or ordinar- and necessar- travellin and re*resentation or entertainent e1*enses*aid or incurred +- the e*lo-ee in the *ursuit o the trade, +usiness or *roession? and

'ii( The e*lo-ee is re8uired to account7li8uidate or the oreoin e1*enses in accordanceith the s*eci6c re8uireents o su+stantiation or each cateor- o e1*enses *ursuant to Sec.%4 o the Code. The e1cess o actual e1*enses over advances ade shall constitute ta1a+leincoe i such aount is not returned to the e*lo-er. Reasona+le aounts orei+urseents7advances or travellin and entertainent e1*enses hich are *reDco*uted ona dail- +asis and are *aid to an e*lo-ee hile he is on an assinent or dut- need not +esu+;ect to the re8uireent o su+stantiation and to ithholdin.

'"( Jacation and sic< leave alloances. Aounts o Gvacation alloances or sic< leavecreditsG hich are *aid to an e*lo-ee constitute co*ensation. Thus, the salar- o an e*lo-eeon vacation or on sic< leave, hich are *aid notithstandin his a+sence ro or


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e1e*ted ro the re8uireent o ithholdin ta1 on co*ensation:

'&( Reunerations received as an incident o e*lo-ent, as ollos:

'a( Retireent +ene6ts received under Re*u+lic Act under ")4& and those received +-ofcials and e*lo-ees o *rivate 6rs, hether individual or cor*orate, under a reasona+le*rivate +ene6t *lan aintained +- the e*lo-er hich eet the olloin re8uireents:

'i( The *lan ust +e reasona+le?

'ii( The +ene6t *lan ust +e a**roved +- the =ureau?

'iii( The retirin ofcial or e*lo-ee ust have +een in the service o the sae e*lo-er orat least ten '&( -ears and is not less than 6t- '!( -ears o ae at the tie o retireent? and

'iv( The retirin ofcial or e*lo-ee should not have *reviousl- availed o the *rivilee underthe retireent +ene6t *lan o the sae or another e*lo-er.

'+( An- aount received +- an ofcial or e*lo-ee or +- his heirs ro the e*lo-er due todeath, sic


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'iii( The raisin or harvestin o another aricultural or horticultural coodit-. The terGarG as used in this su+section includes, +ut is not liited to stoc


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A *rivate hoe is the 61ed *lace o a+ode o an individual or ail-. I the hoe is utili@ed*riaril- or the *ur*ose o su**l-in +oard or lodin to the *u+lic as a +usiness enter*rise, itceases to +e a *rivate hoe and reuneration *aid or services *erored therein is note1e*ted.

In eneral, services o a household nature in or a+out a *rivate hoe include services rendered+- cooeurs o autoo+iles or ail-use.

The reuneration *aid or the services a+ove enuerated hich are *erored in or a+outrooin or lodin houses, +oardin houses, clu+s, hotels, hos*itals or coercial ofces oresta+lishents is considered as co*ensation?

Reuneration *aid or services *erored as a *rivate secretar-, even i the- are *erored inthe e*lo-ers hoe is considered as co*ensation?

'4( Reuneration or casual la+or not in the course o an e*lo-ers trade or +usiness. Theter Gcasual la+orG includes la+or hich is occasional, incidental or reular. The e1*ression Gnotin the course o the e*lo-ers trade or +usinessG includes la+or that does not *roote oradvance the trade or +usiness o the e*lo-er.

Thus, an- reuneration *aid or la+or hich is occasional, incidental or irreular, and does not*roote or advance the e*lo-ers trade or +usiness, is not considered as co*ensation.

cdasiaMAFP9: As +usiness is that o o*eratin a saill. Ee e*lo-s =, a car*enter, at an hourl-ae to re*air his hoe. =s or< is irreular and he s*ends, the reater *art o to da-s inco*letin the or


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'#( Co*ensation or in;uries or sicect on the sae o

the ination rate at the end o the ta1a+le -ear.'&2( HSIS, SSS, Fedicare and other contri+utions. HSIS, SSS, Fedicare and PaDI+icontri+utions, and union dues o individual e*lo-ees.

SCTION 2."$.2. Pa-roll Period . The ter G*a-roll *eriodG eans the *eriod o services orhich a *a-ent o co*ensation is ordinaril- ade to an e*lo-ee +- his e*lo-er. It isiaterial that the co*ensation is not ala-s *aid at reular intervals.

MAFP9: i an e*lo-er ordinaril- *a-s the ee


20/286

or


21/286

anner as i such areate aount had +een *aid +- one e*lo-er. Eence, the ta1 shall +edeterined +ased on the areate aount o the co*ensation *aid. *rcd

In an- such case, each e*lo-er shall +e lia+le or the return and *a-ent o a *roDrata *ortiono the ta1 so deterined in accordance ith the ratio o the aount contri+uted +- eache*lo-er relative to the areate o such co*ensation.

A 6duciar-, aent, or other *erson actin or to or ore e*lo-ers a- +e authori@ed toithhold the ta1 under these reulations ith res*ect to the aes o the e*lo-ees o suche*lo-ers. Such 6duciar-, aent, or other *erson a- also +e authori@ed to a


22/286

'c( 0ee


23/286

Ste* 2. eterine the total onetar- and nonDonetar- co*ensation *aid to ane*lo-ee or the *a-roll *eriod, sereatin ross +ene6ts hich includes thirteenth '&%th(onth *a-, *roductivit- incentives, Christas +onus, and other +ene6ts received +- thee*lo-ee *er *a-roll *eriod. Hross +ene6ts hich are received +- ofcials and e*lo-ees o*u+lic and *rivate entities in the aount o thirt- thousand *esos 'P%,( or less shall +ee1e*ted ro incoe ta1 and ro ithholdin ta1.

Ste* %. Sereate the ta1a+le co*ensation ro the nonDta1a+le incoe *aid to the

e*lo-ee or the *a-roll *eriod. The ta1a+le incoe reers to all reuneration *aid to ane*lo-ee not otherise e1e*ted +- la ro incoe ta1 and conse8uentl- ro ithholdinta1. The nonDta1a+le incoe are those hich are s*eci6call- e1e*ted ro incoe ta1 +- theCode or +- other s*ecial las as listed in Sec. 2."$.& '=( o these Reulations 'e.. +ene6ts note1ceedin P%,, nonDta1a+le retireent +ene6ts and se*aration *a-(.

Ste* 4. Sereate the ta1a+le co*ensation incoe as deterined in Ste* % into reularta1a+le co*ensation incoe and su**leentar- co*ensation incoe. Reular co*ensationincludes +asic salar-, 61ed alloances or re*resentation, trans*ortation and other alloances*aid to an e*lo-ee *er *a-roll *eriod. Su**leentar- co*ensation includes *a-ents to ane*lo-ee in addition to the reular co*ensation such as coission, overtie *a-, ta1a+leretireent *a-, ta1a+le +onus and other ta1a+le +ene6ts, ith or ithout reard to a *a-roll*eriod.

Ste* !. 3i1 the co*ensation level as ollos:'i( eterine the line 'hori@ontal( corres*ondin to the status and nu+er o 8uali6edde*endent children usin the a**ro*riate s-+ol or the ta1*a-er status.

'ii( eterine the colun to +e used +- ta


24/286

MAFP9 II: Fr. =, head o the ail- 'ith a 8uali6ed de*endent *arent( receives P),2. asonthl- reular co*ensation and P$. as su**leentar- co*ensation or /anuar- or atotal o P",..

COFP5TATION: 5sin the onthl- ithholdin ta1 ta+le, the ithholdin ta1 or /anuar- isco*uted +- reerrin to Ta+le A line % E3 o colun 4 '61 co*ensation level ta


25/286

9ess: co*ensation level 'line CD2 Colun 4( %,2!.

1cessP %.

Ta1 on P%,2!. P &4.&"

Ta1 on e1cess 'P%. 1 &!B( 4!.

SeiDonthl- ithholdin ta1 P &4#.&"

MAFP9 J: Fr. , arried ith to '2( 8uali6ed de*endent children receives P%,%. asreular seiDonthl- co*ensation. Frs. , his ie is not e*lo-ed.

COFP5TATION: 5sin the seiDonthl- ithholdin ta1 ta+les, the ithholdin ta1 due isco*uted +- reerrin to Ta+le C line 2 F2 o Colun 4 hich shos a ta1 o P&4.&" on P%,2!*lus &!B o the e1cess '%,% D %,2! P!.(

Total ta1a+le co*ensation P%,%.

9ess: co*ensation level '9ine CD2 Colun 4( %,2!.

1cessP !.

Ta1 on P%,2!. P &4.&"

Ta1 on e1cess 'P!. 1 &!B( ".!

SeiDonthl- ithholdin P &&&.)"

MAFP9 JI: On /une, #$, Fr. 3, sinle receives P%,. as reular onthl- salar- and halo his &%th onth *a- aountin to P&!,. *lus other +ene6ts such as *roductivit- *a- oP&,. and lo-alt- *a- o P),.. Co*ute the ithholdin ta1 o Fr. 3 or the onth o

/une, #$.

COFP5TATION:

Reular 0aeP%,.

Hross =ene6ts:

&%th onth *a- P&!,

Productivit- &,

9o-alt- *a- P),

Total Hross =ene6ts P %&,.

Add Ta1a+le Hross =ene6ts 'P%&, D %, P&,(Q &,.

Total Ta1a+le Co*ensation Incoe P%&,.


26/286

9ess Co*ensation level 22 !.

1cessP $,!.

Ta1 on P22,! 'line A2, col. "( P 4,&)).)"

Ta1 on e1cess 'P$,!. 1 %B( 2,!!.

0ithholdin ta1 or the onth o /une P ),"&).)"

Q ross +ene6t o P%&, less the a1iu total e1e*tions o the ross +ene6t o P%,

'!( 5se o 1ce*tional Co*utations

'a( Cuulative averae ethod. I in res*ect o a *articular e*lo-ee, the reularco*ensation is e1e*t ro ithholdin +ecause the aount thereo is +elo theco*ensation level, +ut su**leentar- co*ensation is *aid durin the calendar -ear? or thesu**leentar- co*ensation is e8ual to or ore than the reular co*ensation to +e *aid? or

the e*lo-ee as nel- hired and had a *revious e*lo-er7s ithin the calendar -ear, otherthan the *resent e*lo-er doin this cuulative co*utation, the *resent e*lo-er shalldeterine the ta1 to +e deducted and ithheld in accordance ith the cuulative averaeethod *rovided hereunder:

Ste* &. Add the aount o ta1a+le reular and su**leentar- co*ensation to +e *aid toan e*lo-ee or the *a-roll *eriod su+;ect o co*utation to the su o the ta1a+le reular andsu**leentar- co*ensation since the +einnin o the current calendar -ear includin theco*ensation *aid +- the *revious e*lo-ers ithin the sae calendar -ear, i an-?

Ste* 2. ivide the areate aount o co*ensation co*uted in ste* & +- the nu+ero *a-roll *eriod to hich the aount relates?

Ste* %. Co*ute the ta1 to +e deducted and ithheld on the cuulative averaeco*ensation deterined in Ste* No. '2( in accordance ith the ithholdin ta1 ta+le? cd*hil

Ste* 4. Fulti*l- the ta1 co*uted in Ste* No. '%( +- the nu+er o *a-roll *eriod to hichit relates?

Ste* !. eterine the e1cess, i an-, o the aount o ta1 co*uted in Ste* No. '4( overthe total aount o ta1 alread- deducted and ithheld ro the +einnin *a-roll *eriod to thelast *a-roll *eriod, includin that ithheld +- the *revious e*lo-er7s ithin the calendar -ear, ian-. The e1cess, as co*uted, shall +e deducted and ithheld ro the co*ensation to +e *aidor the last *a-roll *eriod o the current calendar -ear.

The cuulative averae ethod, once a**lica+le to a *articular e*lo-ee at an- tie durin thecalendar -ear, shall +e the sae ethod to +e consistentl- used or the reainin *a-roll*eriod7s o the sae calendar -ear.

MAFP9 JII: 'Reular onthl- co*ensation is e1e*t ro ithholdin +ut su**leentar-co*ensation is *aid durin the calendar -ear( Fr. H, arried ith three '%( 8uali6edde*endent children hose s*ouse is not e*lo-ed received the olloin co*ensation:

Fonth Reular Su**leentar- Total

Co*ensation Co*ensation Co*ensation

/an. P4,!. P&,"!. P),2!.

3e+. 4,!. &,"!. ),2!.

Far. 4,4. &,!. !,!.


27/286

COFP5TATION:

&. 3or /an. D P),2!. P ),2!.

3or 3e+. D P),2!. ),2!. P&2,!.

3or Far. D P),2! ),2! !,! P&$,.

2. 3or /an. D P),2!7& P ),2!.

3or 3e+. D P&2,!72 P ),2!.3or Far. D P&$,7% P ),.

%. 3or /anuar-

Ta1 on P!,!. '9ine C.%, Col. %( P 4&.)"

Ta1 on e1cess 'P"!. 1 &B( "!.

Ta1 on P),2!. P &&).)"

3or 3e+ruar-

Ta1 on P!,! 'line C.%, col. %( P 4&.)"

Ta1 on e1cess 'P"!. 1 &B( "!.

Ta1 on P),2!P &&).)"

3or Farch

Ta1 on P!,! 'line C.%, col. %( P 4&.)"

Ta1 on e1cess 'P!. 1 &!B( !.

Ta1 on P),. P #&.)"

4. 3or /an. D P&&).)" 1 & P &&).)"

3or 3e+. D P&&).)" 1 2 P 2%%.%4

3or Far. D P#&.)" 1 % P 2"!.&

!. 3or /an. D P&&).)" D P &&).)"

3or 3e+. D P2%%.%4 D &&).)" P &&).)"

3or Far. D P2"!.& D 2%%.%4 P 4&.)"

MAFP9 JIII: 'Su**leental co*ensation is e8ual to or ore than the reular co*ensation( Fr. E, arried ith one '&( 8uali6ed de*endent and hose s*ouse is also e*lo-ed received theolloin co*ensation. Fr. E aived his riht to clai or the additional e1e*tions in avor ohis ie.

Fonth Reular Su**leentar- Total

Co*ensation Co*ensation Co*ensation

/an. P%,. P%,. P),.

3e+. %,. %,!. ),!.


28/286

Far. %,. !,. $,.

COFP5TATION:

&. 3or /an. D P),. P ),.

3or 3e+. D P),. ),!. P&2,!.

3or Far. D P$,. ),. ),!. P2,!.

2. 3or /an. D P),7& P ),.3or 3e+. D P&2,!72 P ),2!.

3or Far. D P2,!7% P ),$%%.%%

%. 3or /anuar-

Ta1 on P!,&)". 'line A4, col. 4( P 2$.%%

Ta1 on e1cess 'P$%%. 1 &!B( P &24.#!

Ta1 on P),. P %%%.2$

3or 3e+ruar-

Ta1 on P!,&)". 'line A4, col. 4( P 2$.%%

Ta1 on e1cess 'P&,$%. 1 &!B( P &)2.4!

Ta1 on P),2!. P %"."$

3or Farch

Ta1 on P!,&)". 'line A 4 col. 4( P 2$.%%

Ta1 on e1cess 'P&,))).%% 1 &!B( P 24#.#!

Ta1 on P),$%%.%% P 4!$.2$

4. 3or /an. D P%%%.2$ 1 & P %%%.2$

3or 3e+. D P%"."$ 1 2 P "4&.!)

3or Far. D P4!$.2$ 1 % P &,%"4.$4

!. 3or /an. D P%%%.2$ D P %%%.2$

3or 3e+. D P"4&.!) D %%%.2$ P 4$.2$

3or Far. D P&,%"4.$4 D "4&.!) P )%%.2$MAFP9 IM: 'Co*utation o onthl- ithholdin ta1 or a ne e*lo-ee ith *reviouse*lo-er durin the -ear( Fs. I, sinle as hired +- M Co. on /ul-, #$. Eer total ta1a+leincoe *er onth is P&,.. She as *reviousl- e*lo-ed +- 0 Co. ro /anuar- to /uneith a onthl- ta1a+le incoe o P),.. Per 3or No. 2%&) 'Certi6cate o Incoe Ta10ithheld on Co*ensation( issued +- the *revious e*lo-er, hich as *resented +- Fs. I to her*resent e*lo-er, the total ta1 ithheld is P2,$##.)$. In co*utin or the ta1 ithheld on theco*ensation o Fs. I startin the onth o /ul-, M Co. shall use the cuulative averae ethod,as ollos: llcd


29/286

Present Total Total

Co*ensation Previous Ta1a+le

Fonth Incoe Incoe Incoe

/59 &,. %),. 4),.

A5H &,. &,.

SPT &,. &,.OCT &,. &,.

NOJ &,. &,.

C &,. &,.

),. %),. #),.

COFP5TATION:

Ste* &

3or /ul- %), &, 4),.

3or Auust 4), &, !),.

3or Se*te+er 4), &, &, )),.

3or Octo+er 4), &, &, &, "),.

3or Nove+er 4), &, &, &, &, $),.

Ste* 2

3or /ul- 4),7" ),!"&.4%

3or Auust !),7$ ",.

3or Se*te+er )),7# ",%%%.%%3or Octo+er "),7& ",).

3or Nove+er $),7&& ",$&$.&$

Ste* %

3or /ul- P),!"&.4%

Ta1 on P4,&)" P 2$.%%

Ta1 on e1cess '2,44.4% 1 &!B( %).))

Ta1 on P),!"&.4% P!)$.##

3or Auust P",.

Ta1 on P4,&)" P2$.%%

Ta1 on e1cess 'P2,$%%. 1 &!B( 424.#!

Ta1 on P", P)%%.2$


30/286

3or Se*te+er P",%%%.%%

Ta1 on P4,&)" P2$.%%

Ta1 on e1cess 'P%,&)).%% 1 &!B( 4"4.#!

Ta1 on P",%%%.%% P)$%.2$

3or Octo+er P",).

Ta1 on P",! P"$.%%

Ta1 on e1cess 'P& 1 2B( 2.

Ta1 on P",) P"2$.%%

3or Nove+er P",$&$.&$

Ta1 on P",! P"$.%%

Ta1 on e1cess 'P%&$.&$ 1 2B( )%.)4

Ta1 on P",$&$.&$ P""&.#"

Ste* 4

3or /ul- P!)$.## M " P%,#$2.#%

3or Auust P)%%.2$ M $ P!,)).24

3or Se*te+er P)$%.2$ M # P),&4#.!2

3or Octo+er P"2$.%% M & P",2$%.%3or Nove+er P""&.#" M && P$,4#&.)"

Ste* !

3or /ul- P%,#$2.#% D 2,$##.)$ P&,$%.2)

3or Auust P!,)).24 D %,#$2.#% P&,$%.%&

3or Se*t. P),&4#.!2 D !,)).24 P&,$%.2$

3or Octo+er P",2$%.% D ),&4#.!2 P&,&%%."$

3or Nov. P$,4#&.)" D ",2$%.% P&,2$.%"

'+( Annuali@ed ithholdin ta1 ethod. 'i( 0hen the e*lo-erDe*lo-ee relationshi* is

terinated +eore the end o the calendar -ear? and 'ii( hen co*utin or the -earDendad;ustent, the e*lo-er shall deterine the aount to +e ithheld ro the co*ensation onthe last onth o e*lo-ent or in ece+er o the current calendar -ear in accordance ith theolloin *rocedures:

Ste* &. eterine the ta1a+le reular and su**leentar- co*ensation *aid to thee*lo-ee or the entire calendar -ear. Reer to Ste*s 2 to ! o Sec. 2."# '=('&('+( o theseReulations, usin as +asis the co*ensation received or the calendar -ear. cd*hil

Ste* 2. I the e*lo-ee has *revious e*lo-ent7s ithin the -ear, add the aount ota1a+le reular and su**leentar- co*ensation *aid to the e*lo-ee +- the *revious e*lo-erdoin the annuali@ed co*utation to the ta1a+le co*ensation incoe received ro *revious


31/286

e*lo-er7s durin the calendar -ear:

'i( 0hen the e*lo-erDe*lo-ee relationshi* is terinated +eore ece+er The ta1a+lereular and su**leentar- co*ensation incoe shall +e the aount *aid since the +einnino the current calendar -ear to the terination o e*lo-ent.

'ii( earDend ad;ustent The ta1a+le reular and su**leentar- co*ensation incoeshall +e the aount *aid since the +einnin o the current calendar -ear to ece+er.

'iii( Ta1a+le rine +ene6ts received +- e*lo-ees holdin anaerial or su*ervisor- *ositionsshall +e su+;ect to a 6nal rine +ene6t ta1 as *rescri+ed in Section 2."# '( o theseReulations . Eence, the sae shall not or *art o the ta1a+le su**leentar- co*ensation, oanaers and su*ervisors, su+;ect to the ithholdin ta1 ta+les.

Ste* %. educt ro the areate aount o co*ensation co*uted in Ste* No. '2( theaount o the total *ersonal and additional e1e*tions o the e*lo-ee.

Ste* 4. educt the aount o *reiu *a-ents on Eealth and7or Eos*itali@ationInsurance o e*lo-ees ho have *resented evidence that the- have *aid durin the ta1a+le-ear *reiu *a-ents 'the deducti+le aount shall not e1ceed P2,4 or P2 *er onthhichever is loer( and that their ail-s total ross incoe does not e1ceed P2!, or thecalendar -ear. 3or *ur*oses o su+stantiatin the clai o insurance e1*ense, the *olic- contractshall +e *resented to the e*lo-er toether ith the oriinal ofcial recei*t o the *reiu

*a-ent, in addition to the docuents hich ill +e *rescri+ed +- the =IR in a se*aratereulation to deterine the areate o his ail- incoe.

Total ail- incoe includes *riar- incoe and other incoe ro sources received +- alle+ers o the nuclear ail-, i.e. ather, other, unarried children livin toether as onehousehold, or a sinle *arent ith children. A sinle *erson livin alone is considered as a nuclearail-.

The s*ouse claiin the additional e1e*tions or the 8uali6ed de*endent children shall +e thesae s*ouse to clai the deductions or *reiu *a-ents.

Ste* !. Co*ute the aount o ta1 on the di>erence arrived at in Ste* 4, in accordanceith the schedule *rovided in Sec. 24 'A( o the Code, as ollos:

Over =ut Not Aount Rate O 1cess

Over Over

not over &, !B

&, %, !&B &,

%, ", 2,!&!B %,

", &4, $,!2B ",

&4, 2!, 22,!2!B &4,

2!, !, !,%B 2!,

!, over &2!,%4B !,

'%%B in ##(

'%2B in 2 and thereater(

Ste* ). eterine the de6cienc- or e1cess, i an-, o the ta1 co*uted in Ste* ! over thecuulative ta1 alread- deducted and ithheld since the +einnin o the current calendar -ear.

The de6cienc- ta1 'hen the aount o ta1 co*uted in Ste* ! is reater than the aount ocuulative ta1 alread- deducted and ithheld or hen no ta1 has +een ithheld ro the+einnin o the calendar -ear( shall +e deducted ro the last *a-ent o co*ensation or thecalendar -ear. I the de6cienc- ta1 is ore than the aount o last co*ensation to +e *aid to ane*lo-ee, the e*lo-er shall +e lia+le to *a- the aount o ta1 hich cannot +e collected rothe e*lo-ee. The o+liation o the e*lo-ee to the e*lo-er arisin ro the *a-ent +- the


32/286

latter o the aount o ta1 hich cannot +e collected ro the co*ensation o the e*lo-ee is aatter o settleent +eteen the e*lo-ee and e*lo-er.

The e1cess ta1 'hen the aount o cuulative ta1 alread- deducted and ithheld is reaterthan the ta1 co*uted in Ste* !( shall +e credited or reunded to the e*lo-ee not later than

/anuar- 2! o the olloin -ear. Eoever, in case o terination o e*lo-ent +eoreece+er, the reund shall +e iven to the e*lo-ee at the *a-ent o the last co*ensationdurin the -ear. In return, the e*lo-er is entitled to deduct the aount reunded ro the

reitta+le aount o ta1es ithheld ro co*ensation incoe in the current onth in hich thereund as ade, and in the succeedin onths thereater until the aount reunded +- thee*lo-er is ull- re*aid.

MAFP9 M: '5se o annuali@ed co*utation hen e*lo-erDe*lo-ee relationshi* asterinated +eore ece+er( Fr. M, head o the ail- ith a 8uali6ed de*endent +rotherreceives P$, as onthl- reular co*ensation startin /anuar- &, #$. On /une &, #$, he6led his resination e>ective /une %, #$. The ta1 ithheld ro /anuar- to Fa- as P%,)24.)!.

COFP5TATION: 'To +e done +eore *a-ent o the co*ensation or /une #$(:

Total co*ensation received ro

/anuar- & to Fa- %&, #$ P4,.

Add: Co*ensation to +e received on /une $,.

Hross co*ensation /anD/une P4$,.

9ess: Personal 1e*tion 2!,.

Net Ta1a+le Co*ensation P2%,.

Ta1 ueQ P&,$.

9ess: Ta1 0ithheld ro /an to Fa-%,)24.

To +e reunded to *lo-ee Fr. M 'P&,$24.)!(

Q Ta1 on P&,. P !.

Ta1 on e1cess 'P&%, 1 &B( &,%.

Ta1 on P%), P &,$.

MAFP9 MI. 'earDend ad;ustents co*utation( 3or ta1a+le -ear #$, Asian F. has the

olloin e*lo-ees:&. Fr. K, arried ith 2 8uali6ed de*endent children ho received the olloinco*ensation or the -ear:

=asic Fonthl- Salar-P4!,

Overtie Pa- or Nove+erP !,

Thirteenth Fonth *a- P4!,

Other =ene6ts P&2,


33/286

2. Fr. 9, arried, hose ie is also e*lo-ed, ith to de*endent children. The secondchild as +orn in ece+er. Ee received or the -ear, the olloin:

=asic Fonthl- Salar-P),!

Thirteenth Fonth Pa- P),!

Other =ene6ts P),

%. Fs. F, sinle, ho as hired in /ul- received the olloin:

=asic Fonthl- Salar-P2,

Thirteenth Fonth Pa- P2,

Fonthl- Salar- ro Previous *lo-er '/anuar-D/une( P ),

She *aid or the -ear an annual *reiu on health and hos*itali@ation insurance aountin toP2,4..

4. Frs. N, arried, hose hus+and is also or


34/286

=asic Salar- P "$, P"$,.

&%th onth *a- ),! P),!

Other +ene6ts ), ),

Totals P#,! P&2,! P "$,.

9ess: Personal and additional e1e*tions 4$,.

Net ta1a+le co*ensation P %,.

Ta1 due P 2,!.

9ess: Ta1 ithheld ro *revious onth '/anDNov.( 2,2#&.)%

Aount to +e ithheld or ece+er P 2$.%"

%. Fs. F. Sinle Co*utation o ithholdin ta1 or ece+er

Co*ensation ro *revious e*lo-er '/an. to /une( P %),.

Co*ensation ro *resent e*lo-er '/ul- to ec( &2,.

Total Ta1a+le Co*ensation '/an. to ec.( P&!),.

9ess: Personal and additional e1e*tions P2,.

Preiu *a-ents on health

hos*itali@ation insurance 2,4. 22,4.

Net Ta1a+le Co*ensation P&%%,).

Ta1 ue P 2&,22.

9ess: Ta1es ithheld

QPrevious e*lo-er P2,$##.)$

QQPresent e*lo-er &!,!#&.#$ &$,4#&.))

Aount o ta1es ithheld or the onth o ece+er P 2,"2$.%4

Q Reer to Certi6cate o Incoe Ta1 0ithheld on Co*ensation issued +- *revious e*lo-er.

QQ Ta1es ithheld ro /ul- to ece+er co*uted +- the *resent e*lo-er usin thecuulative co*utation.

4. Frs. N arried 'co*utation o ta1 u*on resination(:

Total co*ensation

Received or the -ear NonDTa1a+le Ta1a+le


35/286

=asic Salar- P24!, P24!,

&%th onth *a- &",! P&",!

Other +ene6ts ), ),

P2)$,! P2%, P24!,

9ess: Personal and additional e1e*tions %2,

Net ta1a+le co*ensation incoe P2&%,

Ta1 due '/an. to /ul- %( P4,"!.

9ess Ta1 ithheld '/an. to /une( 4!,".2

Over ithheld Ta1 to +e Reunded in the onth o /ul- P'4,#!.2(

The annuali@ed co*utation done or each e*lo-ee shall +e reected +- the e*lo-er at theal*ha+etical list attached to the 3or No. &)4.

'%( I the co*ensation is *aid other than dail-, ee


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s*ecial las as listed in Sec. 2."$.& '=( o these Reulations 'e.. +ene6ts not e1ceedin P%,,nonDta1a+le retireent +ene6ts and se*aration *a-(?

'%( Sereate the ta1a+le rine +ene6t and su+;ect the sae to ithholdin *ursuant toSu+section o these section o the Reulations?

'4( Co*ute ithholdin ta1 on the ta1a+le reular and su**leentar- co*ensation inaccordance ith the *rocedures *rescri+ed in Sec. 2."#'=('&('+( o these reulations, or *ur*oseso ithholdin *er *a-roll *eriod? and Sec. 2."#'=('2( or *ur*oses o co*utin under thecuulative averae ethod or or the -earDend ad;ustent.

'( Co*utation o 0ithholdin Ta1 on 3rine =ene6t.

'&( 3inal ithholdin ta1 on 3rine =ene6ts *aid to e*lo-ees other than ran< and 6le. There shall +e i*osed a 6nal ta1 o %4B +einnin /anuar- &, #$, %%B +einnin /anuar- &,## and %2B +einnin /anuar- &, 2 and thereater, on the rossedDu* onetar- value orine +ene6ts *ursuant to Sec. %% o the Code and its i*leentin reulations, ranted orurnished +- the e*lo-er to his e*lo-ees 'e1ce*t ran< and 6le e*lo-ees( unless the rine+ene6t is re8uired +- the nature o or necessar- to the trade, +usiness or *roession o thee*lo-er, and hen the rine +ene6t is or the convenience and advantae o the e*lo-er.

The rine +ene6t ta1 shall +e *aid +- the e*lo-er in the sae anner as *rovided in Sec. 2.!$o these Reulations. It shall not or *art o the ross incoe o the e*lo-ee. The i*osition o

the rine +ene6ts ta1 should +e the su+;ect o a se*arate set o rules and reulations hichshall +e issued or the *ur*ose.

'2( HrossedDu* onetar- value o 3rine =ene6t.

'a( In eneral the rossedDu* onetar- value o the rine +ene6t shall +e deterined +-dividin the onetar- value o the rine +ene6t +- si1t- si1 *ercent '))B( in #$? si1t- seven*ercent ')"B( in ##? and si1t- eiht *ercent ')$B( in 2 and thereater.

'+( The rossedDu* onetar- value o rine +ene6ts urnished to e*lo-ees and hich areta1a+le under su+sections =, C, , and o Section 2! o the Code shall +e deterined +-dividin the onetar- value o the rine +ene6t +- the di>erence +eteen one hundred *ercent'&B( and the a**lica+le rates o incoe ta1 *rescri+ed on the aoresaid su+Dsections o Section2!, to it: cdasia

Su+section '=( Tent-D6ve *ercent on incoe derived ro sources ithin the Phili**ines +- anonDresident alien individual not enaed in trade or +usiness in the Phili**ines.

Su+section 'C( 3iteen *ercent '&!B( on incoe o an alien individual e*lo-ed +- reional orarea head8uarters o a ultinational co*an- or reional o*eratin head8uarters o aultinational co*an-, includin an- o its 3ili*ino e*lo-ees e*lo-ed and occu*-in the sae*osition as those o its aoresaid alien e*lo-ees.

Su+section '( 3iteen *ercent '&!B( on incoe o an alien individual e*lo-ed +- an o>shore+an


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'c( Contri+utions o the e*lo-er or the +ene6t o the e*lo-ee to retireent, insurance andhos*itali@ation +ene6t *lans.

'd( e iniis +ene6ts. 3or *ur*oses o deterinin hether the rine +ene6t shall +econsidered *a-ents o de iniis +ene6ts, the e*lo-er shall su+it a ritten re*resentationto the Coissioner or the issuance o a rulin tashore +an


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(, u*on e*lo-ent and a 0ithholdin Co*ensation and 1e*tion Certi6cate '3or No.2%!(, in case o u*dates on chanes in his e1e*tions. The ithholdin e1e*tions to hich ane*lo-ee is entitled de*ends u*on his status as sinle, arried, head o the ail- and thenu+er o de*endents 8uali6ed or additional e1e*tions. ach e*lo-ee shall +e alloed toclai the olloin aount o e1e*tions, ith res*ect to co*ensation *aid on or ater /anuar-&, #$.

'&( Personal and additional e1e*tions.

'a( =asic *ersonal e1e*tions.

'i( 3or sinle individual or arried individual ;udiciall- decreed as leall- se*arated ith no8uali6ed de*endents, the aount o *ersonal e1e*tion alloed is tent- thousand *esos'P2,.(?

'ii( 3or each leall- arried e*lo-ee, the aount o *ersonal e1e*tion alloed is thirt- tothousand *esos 'P%2,.(. A arried individual derivin incoe ithin the Phili**ines hoses*ouse is une*lo-ed or is a nonDresident citi@en derivin incoe ro orein sources, shall +eentitled to a *ersonal e1e*tion o thirt- to thousand *esos 'P%2,.( onl-?

'iii( 3or head o a ail-, the aount o *ersonal e1e*tion alloed is tent- 6ve thousand*esos 'P2!,.(. Eead o the ail- eans an unarried or leall- se*arated an or oanith one or +oth *arents or one or ore +rothers or sisters hether o the hole or hal +lood or

ith one or ore leitiate or illeitiate, reconi@ed natural or leall- ado*ted children livinith and de*endent u*on hi or their chie su**ort, here such +rothers or sisters or childrenare not ore than tent- one '2&( -ears o ae, unarried and not ainull- e*lo-ed or heresuch children, +rothers, or sisters, reardless o ae are inca*a+le o selDsu**ort +ecause oental or *h-sical deect. The ter also includes an unarried or leall- se*arated an oroan ho is the +eneactor o a 8uali6ed senior citi@en.

A senior citi@en is an- resident citi@en o the Phili**ines o at least si1t- ')( -ears old, includinthose ho have retired ro +oth overnent ofces and *rivate enter*rises, and has an incoeo not ore than Si1t- thousand *esos 'P),( *er annu su+;ect to the revie o the Nationalconoic evelo*ent Authorit- 'NA( ever- three -ears 'de6nition ta


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*roessional incoe. In the case o hus+and and ie, the hus+and shall +e the *ro*er claianto the e1e*tions unless he aives it in avor o his ie.

'=( *lo-er. The e*lo-er ith ho the e*lo-ees A**lication or Reistration '3orNo. ( is 6led, ust indicate the date o recei*t thereon and acco*lish Part J o the saidA**lication *ertainin to *lo-ers Inoration such as TIN, *lo-ers Reistered Nae, andother relevant inoration. 99*hil

'C( Procedures or the 6lin o the A**lication '3or No. (

'&( All e*lo-ers shall re8uire their e*lo-ees to acco*lish in du*licate the A**lication orReistration descri+ed a+ove as ollos:

'a( All e*lo-ees ho have not 6led the A**lication or Reistration '=IR 3or (, as oece+er %&, #", shall acco*lish and 6le the a**lication ith their e*lo-ers not later thanA*ril %, #$?

'+( Ne e*lo-ees shall acco*lish and 6le the A**lication ithin ten '&( da-s ro thedate o coenceent o e*lo-ent?

'c( In case o chanes in the inoration data in the A**lication '=IR 3or ( *reviousl-su+itted +- the e*lo-ee, consistin o chanes in *ersonal and additional e1e*tions,e*lo-ent7or


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aived the sae 'e1e*tions o children( in avor o his ie ho ill no deduct saide1e*tions ro her incoe in co*utin her ta1 due.

0aiver e1ercised durin the calendar -ear shall +e ade onl- once in a calendar -ear and shalltaect or the *resent calendar -ear and succeedin -ear7s until revo


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later than /anuar- 2! o the succeedin -ear shall, in addition to an- *enalties *rovided in Title Mo the Code , as aended, +e lia+le to a *enalt- e8ual to the total aount o reund hich asnot reunded to the e*lo-ee resultin ro an- e1cess o the aount ithheld over the ta1actuall- due on their return.

'=( *lo-ee. 0here an e*lo-ee ails or reuses to 6le the ithholdin e1e*tioncerti6cate or illull- su**lies alse or inaccurate inoration thereunder ater due ritten notice+- the e*lo-er, the ta1 otherise to +e ithheld +- the e*lo-er shall +e collected ro hi

includin *enalties or additions to the ta1 ro the due date o reittance until the date o*a-ent. On the other hand, here the e*lo-ee, ater due ritten notice ro the e*lo-er,illull- ails or reuses to 6le the a**lication or reistration OR the ithholdin e1e*tioncerti6cate or illull- su**lies alse and inaccurate inoration, the e1cess ta1es ithheld +- thee*lo-er shall not +e reunded to the e*lo-ee +ut shall +e oreited in avor o the overnent.

'C( Additions to Ta1.

'&( There shall +e i*osed, in addition to the ta1 re8uired to +e *aid, a *enalt- e8uivalent totent- 6ve *ercent '2!B( o the aount due, in the olloin cases:

'a( 3ailure to 6le an- return and *a- the ta1 due thereon as re8uired under the *rovisions othe Code or these reulations on the date *rescri+ed? or

'+( 5nless otherise authori@ed +- the Coissioner, 6lin a return ith an internal revenue

ofcer other than those ith ho the return is re8uired to +e 6les? or'c( 3ailure to *a- the de6cienc- ta1 ithin the tie *rescri+ed or its *a-ent in the notice oassessent? or

'd( 3ailure to *a- the ull or *art o the aount o ta1 shon on an- return re8uired to +e 6ledunder the *rovisions o the Code or these reulations, or the ull aount o ta1 due or hich noreturn is re8uired to +e 6led, or +eore the date *rescri+ed or its *a-ent? or

'e( In case o illul nelect to 6le the return ithin the *eriod *rescri+ed +- the Code orreulations, or in case a alse or raudulent return is illull- ade, the *enalt- to +e i*osedshall +e 6t- *ercent '!B( o the de6cienc- ta1, in case an- *a-ent has +een ade on the+asis o such return +eore the discover- o the alsit- or raud.

'( The *enalties i*osed hereunder shall a**l- in the case o a de6cienc- ta1 assessent

hich has +ecoe 6nal and e1ecutor- +ut hich is not *aid ithin the tie *rescri+ed or*a-ent. The interest shall +e i*osed on the total aount due, inclusive o the de6cienc-increents.

'2( Interest There shall +e assessed and collected on an- un*aid aount o ta1, an interestat the rate o tent- *ercent '2B( *er annu, or such hiher rate as a- +e *rescri+ed or*a-ent until the aount is ull- *aid.

'%( e6cienc- Interest An- de6cienc- in the +asic ta1 due, as the ter is de6ned in theCode, shall +e su+;ect to the interest *rescri+ed in *arara*h 'a( hereo, hich interest shall +eassessed and collected ro the date *rescri+ed or its *a-ent until the ull *a-ent thereo.Cd*r

I the ithholdin aent is the overnent or an- o its aencies, *olitical su+divisions, orinstruentalities or a overnentDoned or controlled cor*oration, the e*lo-ee thereores*onsi+le or the ithholdin and reittance o ta1 shall +e *ersonall- lia+le or the surchareand interest i*osed herein .

'( 3ailure to 3ile Certain Inoration Returns 'Sec. 2! o the Code(. In the case o eachailure to 6le an inoration return, stateent or list, or


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'( S*eci6c Penalties. Notithstandin the *enalties hereunder *rovided, the olloinviolations a- +e e1tra;udiciall- settled throuh co*roise *ursuant to Sec. 24 o the Code.

'&( 3ailure to 6le return, su**l- correct and accurate inoration, *a- ta1, ithhold and reitta1 and reund e1cess ta1 ithheld on co*ensation 'Sec. 2!! o the Code(. An- *ersonre8uired under the Code, as aended, or +- reulations to *a- an- ta1, a


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authori@ed ofcers.

0ith res*ect to an- ta1 re8uired to +e ithheld +- a 6duciar-, the returns shall +e ade in thenae o the individual, estate, or trust or hich such 6duciar- acts, and shall +e sined andveri6ed +- such 6duciar-. In the case o to or ore ;oint 6duciaries the return shall +e sinedand veri6ed +- one o such 6duciaries.

SCTION 2.$2. Return and Pa-ent in Case 0here the Hovernent is the *lo-er. Ithe Hovernent o the Phili**ines, its *olitical su+division or an- aenc- or instruentalit-, asell as overnentDoned or controlled cor*oration is the e*lo-er, the returns o the ta1 a-+e ade +- the ofcer or e*lo-ee havin control o *a-ent o co*ensation or other ofcer ore*lo-ee a**ro*riatel- desinated or the *ur*ose.

SCTION 2.$%. Stateent and Returns.

SCTION 2.$%.&. *lo-ees 0ithholdin Stateents '=IR 3or No. 2%&)( . In eneral,ever- e*lo-er or other *erson ho is re8uired to deduct and ithhold the ta1 on co*ensationand rine +ene6ts shall urnish ever- e*lo-ee ro hose co*ensation ta1es have +eenithheld the Certi6cate o Incoe Ta1 0ithheld on Co*ensation '3or No. 2%&), orerl- 3orNo. 0D2( on or +eore /anuar- %& o the succeedin calendar -ear, or i his e*lo-ent isterinated +eore the close o such calendar -ear, on the da- on hich the last *a-ent oco*ensation is ade.

The e*lo-er shall urnish each e*lo-ee ith the oriinal and du*licate co*ies o 3or No.2%&) shoin the nae and address o the e*lo-er? e*lo-ers TIN? nae and address o thee*lo-ee? e*lo-ees TIN? aount o e1e*tions claied? aount o *reiu *a-ents onedical insurance not e1ceedin P2,4., i an-? the su o co*ensation *aid includin thenonDta1a+le +ene6ts? the aount o ta1 due? the aount o ta1 ithheld durin the calendar -earand such other inoration as a- +e re8uired. The stateent ust +e sined +- +oth thee*lo-er or other authori@ed ofcer and the e*lo-ee, and shall contain a ritten declarationthat it is ade under the *enalties o *er;ur-. I the e*lo-er is the Hovernent o thePhili**ines, its *olitical su+division, aenc- or instruentalit- or overnentDoned or controlledcor*oration, the stateent shall +e sined +- the dul- desinated ofcer or e*lo-ee.

An e1tra co*- o 3or 2%&) shall +e urnished +- the e*lo-ee, dul- certi6ed +- hi, to his nee*lo-er. cd*hil

SCTION 2.$%.2. Annual Inoration Return o Incoe Ta1 0ithheld on Co*ensation '3orNo. &)4, 3orerl- 3or No. &"4%IR( . ver- e*lo-er or other *erson re8uired to deduct andithhold the ta1 shall, on or +eore /anuar- thirt-D6rst o the succeedin -ear, 6le ith either theCollection Aent or Authori@ed Funici*al Treasurer or Revenue istrict Ofcer or Coissionerthe Annual Inoration Return o Incoe Ta1 0ithheld on Co*ensation '=IR 3or No. &)4(, to+e su+itted ith an al*ha+etical list o e*lo-ees, +oth in du*licate co*ies.

'A( The Annual Inoration Return o Incoe Ta1 0ithheld on Co*ensation ust shoaon others, the olloin:

'&( 0ithholdin Aents reistered nae, address and Ta1*a-ers Identi6cation Nu+er 'TIN(?

'=( The al*ha+etical list o e*lo-ees ust sho the olloin:

'&( Nae and TIN o e*lo-ees?

'2( Hross co*ensation *aid +- *resent and *revious e*lo-ers or the calendar -ear?

'%( 'a( Ta1a+le &%th onth *a-7Other +ene6ts or the ran< and 6le e*lo-ees

'+( Ta1a+le rine +ene6ts or anaerial e*lo-ees

'4( NonDta1a+le &%th onth *a-7Other +ene6ts 'Present e*lo-er(

'!( Aount o e1e*tions?

')( Aount o *reiu *a-ents on edical insurance not e1ceedin P2,4., i an-?

'"( Ta1 re8uired to +e ithheld co*uted in accordance ith Sec. 24'A( o the Code?


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'$( Ta1 ithheld +- all *resent e*lo-ers or calendar -ear? and

'#( Ad;ustent, i an-.

'C( The al*ha+etical list o e*lo-ees shall +e *re*ared indicatin aon others, se*aratelistins o the olloin:

'&( *lo-ees as o ece+er %& o the ta1a+le -ear ithout *revious e*lo-ent durinthe -ear?

'2( *lo-ees as o ece+er %& o the ta1a+le -ear ith *revious e*lo-ent ithin the-ear?

'%( *lo-ees ho ere terinated *rior to the -earDend ad;ustent co*utation shointhe onth o terination7onth o last *a-ent o co*ensation durin the -ear o terination?and

'4( Alien e*lo-ees su+;ect to 6nal ithholdin ta1.

In cases here no inoration as *rovided +- a *revious e*lo-er, such act should +eannotated in 3or &)4 and the *resent e*lo-er shall not +e lia+le to an- *enalties.

SCTION 2.$%.%. Re8uireent or Incoe Pa-ees 9ist. In lieu o the anuall- *re*aredal*ha+etical list o e*lo-ees and list o *a-ees and incoe *a-ents su+;ect to credita+le and6nal ithholdin ta1es hich are re8uired to +e attached as interal *art o the Annual Return'3or No. &)4(, the 0ithholdin Aent a-, at its o*tion, su+it co*uterD*rocessed ta*es orcassettes or dis


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ta1 on co*ensation shall a**l- to co*ensation actuall- or constructivel- *aid. Co*ensationis constructivel- *aid ithin the eanin o these Reulations hen it is credited to the accounto or set a*art or an e*lo-ee so that it a- +e dran u*on +- hi at an- tie althouh notthen actuall- reduced to *ossession. To constitute *a-ent in such a case, the co*ensationust +e credited or set a*art or the e*lo-ee ithout an- su+stantial liitation or restriction asto tie or anner o *a-ent or condition u*on hich *a-ent is to +e ade, and ust +eade availa+le to hi so that it a- +e dran u*on at an- tie, and its *a-ent +rouht ithhis control and dis*osition. A +oo< entr-, i ade, should indicate an a+solute transer ro oneaccount to another. I the incoe is not credited, +ut it is set a*art, such incoe ust +eun8uali6edl- su+;ect to the deand o the ta1*a-er. 0here a cor*oration continentl- credits itse*lo-ees ith a +onus stoc


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Fonthl- JalueDAdded Ta1 eclaration '=IR 3or 2!!F( in du*licate and the aount ithheld*aid u*on 6lin the return ith the authori@ed aent +an


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'%( International carriers

'a( On ross *a-ents to international air carriers doin +usiness in the Phili**ines Three*ercent '%B(

'+( On ross *a-ents to international shi**in carriers doin +usiness in the Phili**ines Three *ercent '%B(

'4( 3ranchises

'a( On ross *a-ents to all ranchises on radio and7or television +roadcastin co*anieshose annual ross recei*ts o the *recedin -ear does not e1ceed P&,. Three *ercent'%B(

'+( On ross *a-ents to ranchises on electric, as and ater utilities To *ercent '2B(

'!( =an


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'd( *reius collected or received on account o an- reinsurance, i the insured, in case o*ersonal insurance resides outside the Phili**ines, i an- ta1 on such *reius is i*osed +- aorein countr- here the oriinal insurance has +een issued or *erected? 99*hil

'e( *ortion o the *reius collected or received +- the insurance co*anies on varia+lecontracts in e1cess o the aounts necessar- to insure the lives o the varia+le contract or


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overnent ofce is located e1ce*t in cases here the Coissioner otherise *erits. There8uired return shall +e 6led and *a-ents ade ithin ten '&( da-s olloin the end o theonth the ithholdin as ade. *rcd

'C( Certi6cate o internal revenue ta1es ithheld. ver- ithholdin overnent ofce,aenc- or entit- shall urnish each *ro*rietor, o*erator, coon carrier, ranchise holder, +anect, in a reund.

SCTION %. Luali6cation or Reistration. An- *erson, cor*oration, *artnershi* or other entit-doin +usiness in the Phili**ines shall, +eore reistration, satis- the Phili**ine 1*ort Councilthat:


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'a( Ee or it is actuall- enaed in the anuacture, *roduction or *rocessin o articles or*roducts in coercial 8uantit- or e1*ort hich eet the 8ualit- standards set +- the =ureau oStandards or such articles or *roducts.

'+( Ee or it is enaed or ill enae in +u-in Phili**ineDade *roducts ro a reisterede1*ort *roducer and su+se8uentl- e1*ortin the sae.

SCTION 4. A**lication or Reistration.

'a( Processin and valuation. In *rocessin o a**lications or reistration, the Councila-, in its sound discretion, desinate an- co*etent overnent aenc- to evaluate thea**lications, a


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onth olloin the calendar 8uarter hen the sale too< *lace.

In order to su+stantiate the clai or ta1 e1e*tion, the reistered e1*ort *roducer ust su+itto the =ureau o Internal Revenue the olloin docuents:

&. A *hotostatic co*- o the certi6cate o reistration issued +- the Phili**ine 1*ort Council?and

2. Co*ies o invoices, +ills o ladin, inard letters o credit, landin certi6cates, and other

coercial docuents evidencin the actual e1*ortation o *roducts and7or articles sold.'+( Ta1 Credit The =ureau o Internal Revenue shall issue a**ro*riate ta1 credit certi6catesonl- to e1*ort *roducers reistered ith the Council.

A reistered e1*ort *roducer can avail o the ta1 credit in the olloin situations:

A. Sale +- a reistered e1*ort *roducer to another reistered e1*ort *roducer:

&( 0here the ta1 is +illed as a se*arate ite in the sales invoice, the *urchaser '2ndreistered e1*ort *roducer( can clai ta1 credit or the ta1es *aid on ra aterials, *arts orco*onents *urchased and utili@ed in the anuacture or *roduction o its e1*ort articles?

2( 0here the ta1 is not +illed as a se*arate ite in the sales invoice, the seller '&st reisterede1*ort *roducer( is the one entitled to clai the ta1 credit or ta1es *aid on ra aterials, *artsor co*onents utili@ed in the anuacture or *roduction o 6nished articles and7or *roductstoether ith sales ta1es *aid on said articles or *roducts sold to another reistered e1*ort*roducer.

=. Sale +- reistered e1*ort *roducer to a reistered e1*ort trader and7or orein tourists andtravelers:

0hether or not the sales ta1 is +illed as a se*arate ite in the sales invoice, onl- the reisterede1*ort *roducer can clai the ta1 credit or ta1es *aid on ra aterials, *arts or co*onentsutili@ed in the anuacture or *roduction o 6nished articles and7or *roducts sold to a reisterede1*ort trader and7or orein tourists and travelers.

In order to avail o the ta1 credit +ene6t *ursuant to Section 22'(, second *arara*h o the Ta1Code, the olloin docuents shall +e su+itted to the =ureau o Internal Revenue:

&. A ritten a**lication or said ta1 credit, hich ust +e 6led ithin one '&( -ear ro dateo the actual e1*ortation o the *roduct and7or article, toether ith the co*ies o shi**in orother docuents evidencin actual e1*ortation? and

2. Sales invoices or other docuents ro su**liers or sellers o ra aterials, *art,accessor- or other article orin *art o the 6nished *roduct e1*orted.

Illustrative e1a*les on the anner o availent o incentives are shon in Illustration Nos. &, 2,% and 4 o Anne1 GAG.

SCTION $. Cancellation o Reistration. An- Certi6cate o Reistration issued under thisecree a- +e revo


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Y

Cash7Accounts Receiva+le

P&&,.

Sales P&,.

Sales Ta1 Pa-a+le &,.

To record sales o anuactured articles to GCG.IN TE =OOKS O3 GC G

Purchases P&,.

eerred Ta1 Credit &,.

Cash7Accts. Pa-a+le P&&,.

To record *urchase o ra aterials ro G=G.

Y

'%( eterination o Sales Ta1 9ia+ilit-:

The sale ade +- G=G to GCG is not su+;ect to sales ta1. The sale +eteen the and the

su+se8uent actual e1*ortation +- GCG o his anuactured *roducts +oth occurred ithin the8uarter hen the sale too< *lace. Since the sales ta1 as +illed as a se*arate ite in the salesinvoice issued +- G=G to GCG, the olloin are the recoended accountin entries:

IN TE =OOKS O3 G=G

Sales Ta1 Pa-a+le P&,.

Fiscellaneous Incoe P2,.

eerred Ta1 Credit P$,.

To taset sales ta1 *a-a+le aainst deerred ta1 credit as aresult o e1e*tion ro sales ta1.

Y

IN TE =OOKS O3 GCG

Purchases P2,.

Ta1 Credit Receiva+le $,.

eerred Ta1 Credit P&,.

To set u* ta1 credit receiva+le ro =IR and to chare *urchases or the unrecovered aount *aidon the ra aterials used in the 6nished *roducts sold.

Y

or the olloin alternative entries:

IN TE =OOKS O3 G=G


Accts. Pa-a+le, C P2,.

eerred Ta1 Credit $,.

To o>set sales ta1 *a-a+le aainst deerred ta1 credit and to set u* account *a-a+le to GCGre*resentin e1cess aount collected ro GCG as a result o e1e*tion ro sales ta1.

IN TE =OOKS O3 GCG

Accts. Receiva+le, G=G P2,.


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Ta1 Credit Receiva+le $,.

eerred Ta1 Credit P&,.

To set u* ta1 credit receiva+le ro =IR and accounts receiva+le ro G=G or ta1 *reviousl- *aidon ra aterials used.

The sales ta1 +illed se*aratel- +- G=G to GCG as not reitted to the =ureau o Internal Revenueor the sale as e1e*t ro sales ta1. The sales ta1 lia+ilit- o G=G as e1tinuished +- actual

e1*ortation o the 6nished articles +- GCG +eore the due date or the *a-ent o the sales ta1 +-G=G 'on or +eore A*ril 2, "#(. In this *articular situation, G=G can no loner clai ta1 credit orP$,. ta1es *reviousl- *aid on ra aterials +ecause he has, in e>ect, +een rei+ursed +-GCG or the P$,. *lus the additional P2,. hich he should reconi@e as iscellaneousincoe or as a lia+ilit- to GCG. On the other hand, GCG can clai onl- P$,. ta1 creditre*resentin the actual aount collected +- the overnent ro GAG, and GCG can chare theP2,. collected ro hi +- G=G to *urchases or set u* accounts receiva+le ro G=G.

'=( Sale +- a Reistered 1*ort Producer to Another Reistered 1*ort Producer ConsideredGoestic SalesG urin the Luarter 0hen the Sale as Consuated.

3ACTS: Siilar 3acts as in Illustration No. &'A( e1ce*t that the sale ade +- G=G to GCG occurred on3e+ruar- !, "# hile the actual e1*ortation o the 6nished articles +- GCG ha**ened on Fa- !,"#. The sale +eteen G=G and GCG ill +e considered as Goestic salesG or the 8uarter endin

Farch %&, "# and Ge1*ort salesG onl- or the 8uarter endin /une %, "#. In this situation, G=Gcan no loner clai ta1 credit or he has alread- +een rei+ursed +- GCG.

The sales ta1 lia+ilit- +- G=G or the 8uarter endin Farch %&, "# is co*uted, as ollos:

Sellin Price P&,.

Sales Ta1 ueP&,.

9ess: Ta1 Credit $,.

Net Sales Ta1 ue Pa-a+le P2,.

In the +oo


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Cash7Accounts Receiva+le P&&,.

Sales P&&,.

To ta


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OR TE 3O99O0INH A9TRNATIJ NTRIS:

Sales Ta1 1*ense P&&,.


Cash %,.

To ta


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Purchases P&&,.

Cash7Accounts Pa-a+le P&&,.

Purchase o ra aterials ro GMG.

eterination o the sales ta1 lia+ilit- o GMG:

Sellin Price P&,.

Sales Ta1 ueMFPT

Recoended Accountin ntries:



Fisc. Incoe 2,.

To taset sales ta1 *a-a+le aainst deerred ta1 credit as aresult o e1e*tion ro sales ta1.

IN TE =OOKS O3 GG

NON'=( Siilar acts as in Illustration No. %'A( e1ce*t that the e1*ortation as ade ater the 2thda- o the onth olloin the close o the calendar 8uarter hen the sale +eteen GMG and GGtoo< *lace.

Since the sales ta1 as +illed as a se*arate ite in the invoice and that the actual e1*ortation +-GG too< *lace ater the 2th da- o the onth olloin the close o the *recedin calendar8uarter, the sale o GMG to GG shall +e considered Gdoestic saleG durin the said 8uarter.

eterination o Sales Ta1 9ia+ilit- o GMG:

Sellin Price P&,.

Sales Ta1 ueP&,.9SS: Ta1 Credit $,.

Net Sales Ta1 ue and Pa-a+le P2,.


IN TE =OOKS O3 GMG



Cash 2,.

To ta


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I995STRATION NO. 4 0here the ta1 is not +illed as a se*arate ite in the sales invoice.

'A( Siilar acts as in Illustration No. %'A( e1ce*t that the sales ta1 as not +illed as ase*arate ite in the invoice and the sale o GMG to GG, and the actual e1*ortation o the 6nishedarticles +- GG occurred ithin the sae 8uarter:

Sellin Price P&&,.

Accountin ntries:

IN TE =OOKS O3 GMG

Cash7Accounts Receiva+le P&&,.

Sales P&&,.

To record sales o anuactured *roducts to GG.

Ta1 Credit Receiva+le P$,.


To set u* availent o ta1 credit 'hen sales as considered as doestic sale.(

Y

IN TE =OOKS O3 GG

NON

'=( Siilar acts as in Illustration No. %'A( e1ce*t that the sales ta1 as not +illed as ase*arate ite in the sales invoice and the sale o GMG to GG and actual e1*ortation +- GG asade ater the 2th da- o the onth olloin the *recedin calendar 8uarter hen the sale+eteen GMG and G too< *lace and thereore considered as Gdoestic saleG.

eterination o sales ta1 lia+ilit- o GMG:

Sellin Price P&&,.

Sales Ta1 ueP&&,.9SS: Ta1 Credit $,.

NT SA9S TAM 5 AN PAA=9 P%,.


IN TE =OOKS O3 GMG

eerred Ta1 Credit P%,.

Cash P%,.

To ta


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NON

OR TE 3O99O0INH A9TRNATIJ NTRIS :

Sales Ta1 1*ense P&&,.


Cash %,.

To ta


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SUBJECT : Amen'ing Re+ene 6em#*)n'm O*'e* N#. 70-99 ')te' 6)*"( 34%3999 p*e,"*i!ing t(e ling #1 *et*n, ! t(#,e in'i+i')l, e/empt 1*#m t)/ ), p*#+i'e'n'e* Se"ti#n 27 B; )n' C; in *el)ti#n t# Se"ti#n


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SCTION %. Co*liance and Adinistrative Procedures:

&. ver- *erson classi6ed ithin the sco*e o this Revenue Reulation, shall aectivit-: This Reulation shall taect iediatel-.

'SH.( HARO =. SPIRIT5

Secretar- o 3inance

Recoendin A**roval:

'SH.( =TEOJN 9. R5A9O

Coissioner o Internal Revenue

ANNM A


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RA 999$

RULE IV

RIVILEGES OR T=E SENIOR CITI>ENS

A*ti"le ?.OSCA-issued Senior Citizens' Identifcation Card.D 3or the availent o +ene6ts and*rivilees under the Act and these Rules, the senior citi@en, or his7her dul- authori@edre*resentative, shall *resent as *roo o elii+ilit-, a valid and oriinal Senior Citi@ensIdenti6cation Card issued +- the Eead o the Ofce o Senior Citi@ens A>airs 'OSCA( o the *lacehere the senior citi@en resides, and hich shall +e honored nationide.

A*ti"le 4.Twenty Percent (20%) iscount and !AT "#e$tion D The senior citi@ens shall +eentitled to the rant o tent- *ercent '2B( discount and to an e1e*tion ro the valueDaddedta1 'JAT(, I3 APP9ICA=9, on the sale o the oods and services covered +- Section & to ) o thisArticle, ro all esta+lishents or the e1clusive use and en;o-ent or availent o seniorciti@ens.

3or this *ur*ose, the e*artent o 3inance 'O3( throuh the =ureau o Internal Revenue '=IR(shall coe u* ith the a**ro*riate Revenue Reulations on the 2B senior citi@ens discount andJAT e1e*tion ithin thirt- '%( da-s ro e>ectivit- o these Rules that shall cover aonothers, ne invoicin *rocedures, re*ortorial re8uireents, and a s-ste or claiin ta1deductions.

Se"ti#n 3.&"ICA"AT" PI!I"*"S

'a( 6E@ICINE AN@ @RUG URC=ASESD The 2B discount and JAT e1e*tion shalla**l- to the *urchase o eneric or +randed edicines and drus +- or or senior citi@ens,includin the *urchase o inuen@a and *neuococcal vaccines. The 2B discount andJAT e1e*tion shall also +e ranted to the *urchase o vitains and ineral su**leentshich are edicall- *rescri+ed +- an attendin *h-sician or *revention and treatent odiseases, illness, or in;ur-.

'+( ESSENTIAL 6E@ICAL SULIES% ACCESSORIES AN@ EUI6ENTD The 2Bdiscount and JAT e1e*tion *rivilee shall also a**l- to the *urchase o e-elasses,hearin aids, dentures, *rosthetics, arti6cial +one re*laceents li


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'c( 6E@ICAL AN@ @ENTAL SERVICES IN T=E RIVATE ACILITIESD Fedical anddental services, dianostic and la+orator- tests such as +ut not liited to MDRa-s,co*uteri@ed toora*h- scans, and +lood tests, that are re8uested +- a *h-sician asnecessar- or the dianosis and7or treatent o an illness or in;ur- are su+;ected to the2B discount and JAT e1e*tion.

'd( ROESSIONAL EES O ATTEN@ING =SICIANSin all *rivate hos*itals, edical

acilities, out*atient clinics and hoe health care acilities shall +e su+;ected to the 2Bdiscount and JAT e1e*tion.

'e( ROESSIONAL EES O LICENSE@ =EALT= ORDERS ROVI@ING =O6E

=EALT= CARE SERVICESas endorsed +- *rivate hos*itals or e*lo-ed throuh hoehealth care e*lo-ent aencies are entitled to the 2B discount and JAT e1e*tion.

The +urden o the discount shall +e +orne solel- +- the e*lo-ent aenc- iven thehealth or


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as de6ned under these Rules, and no *ro1ies or authori@ation in avor o another *ersonho is not a senior citi@en ill +e honored.

'd( Consistent ith the intent o the Act, the *hrase Ge1clusive use and en;o-entG o thesenior citi@en shall ean Gor the senior citi@ens *ersonal consu*tionG onl-. As such, the2B senior citi@en discount shall not a**l- to Gchildrens ealsG hich are *riaril-*re*ared and intentionall- ar


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Rule or the deceased senior citi@en u*on *resentation o the death certi6cate. Such e1*ensesshall cover the *urchase o casered discount or the2B discount *rovided herein, hichever is hiher and ore avora+le.

In cases here the senior citi@en is also a *erson ith disa+ilit- 'P0( entitled to a 2B discountunder his7her valid P0 identi6cation card 'I(, the senior citi@en shall use either his7her OSCADissued I card or P0 I card to avail o the 2B discount.

A*ti"le 30. TA @E@UCTIOND The esta+lishent a- clai the discounts *rovided herein asta1 deductions +ased on the cost o the oods sold or services rendered: Provided. That the costo the discount shall +e alloed as deduction ro the ross incoe or the sae ta1a+le -earthat the discount is ranted: Provides, urther, That the total aount o the claied ta1 deductionnet o JAT, i a**lica+le, shall +e included in their ross sales recei*ts or ta1 *ur*oses and shall+e su+;ect to *ro*er docuentation and to the *rovisions o the National Internal Revenue Code'NIRC(, as aended.

3or this *ur*ose, the e*artent o 3inance 'O3( throuh the =ureau o Internal Revenue '=IR(shall coe u* ith the a**ro*riate Revenue Reulations on the 2B senior citi@ens discount andJAT e1e*tion ithin thirt- '%( da-s ro e>ectivit- o these Rules.


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RA 92


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'a( an I issued +- the cit- or unici*al a-or or o the +arana- ca*tain o the *lace herethe senior citi@en or the elderl- resides?

'+( the *ass*ort o the elderl- *erson or senior citi@en concerned? and

'c( other docuents that esta+lish that the senior citi@en or elderl- *erson is a citi@en o theRe*u+lic and is at least si1t- ')( -ears o ae.

The esta+lishent a- clai the discounts ranted under 'a(, '(, '( and 'h( as ta1 deduction

+ased on the net cost o the oods sold or services rendered: Provided, That the cost o thediscount shall +e alloed as deduction ro ross incoe or the sae ta1a+le -ear that thediscount is ranted. Provided, urther, That the total aount o the claied ta1 deduction net ovalue added ta1 i a**lica+le, shall +e included in their ross sales recei*ts or ta1 *ur*oses andshall +e su+;ect to *ro*er docuentation and to the *rovisions o the National Internal RevenueCode, as aended.G


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RA 4$72

SECTION $. *i+ilege, 1#* t(e Seni#* Citi5en,. The senior citi@ens shall +e entitled to theolloin:

a( the rant o tent- *ercent '2B( discount ro all esta+lishents relative to utili@ation otrans*ortation services, hotels and siilar lodin esta+lishent, restaurants and recreationcenters and *urchase o edicine an-here in the countr-: Provided, That *rivate esta+lishents

a- clai the cost as ta1 credit?+( a iniu o tent- *ercent '2B( discount on adission ees chared +- theaters,cinea houses and concert halls, circuses, carnivals and other siilar *laces o culture, leisure,and auseent? cdt

c( e1e*tion ro the *a-ent o individual incoe ta1es: Provided, That their annualta1a+le incoe does not e1ceed the *ro*ert- level as deterined +- the National conoic andevelo*ent Authorit- 'NA( or that -ear?

d( e1e*tion or trainin ees or socioeconoic *roras underta


79/286


SUBJECT : Implementing t(e *#+i,i#n, #1 t(e N)ti#n)l Inte*n)l Re+ene C#'e%A, Amen'e' B Rep!li" A"t N#. 8$2$% Rel)ti+e t# t(e Imp#,iti#n #1 In"#me T)/e, #nIn"#me @e*i+e' Un'e* t(e #*eign C**en" @ep#,it )n' OF,(#*e B)ning S,tem,


SCOP Pursuant to Section 244, in relation to Sections 24, 2!, 2" and 2$ o the National

Internal Revenue Code o #", as aended +- R.A. No. $424, these Reulations are here+-*roulated to overn the i*osition o incoe ta1es on incoe derived under the 3oreinCurrenc- e*osit and O>shore =anshore =anshore =anshore +anshore =an


80/286

Currenc- e*osit S-ste

'&( Interest incoe hich is actuall- or constructivel- received +- a resident citi@en o thePhili**ines or +- a resident alien individual ro a orein currenc- +an< de*osit shall +e su+;ectto a 6nal ithholdin ta1 o seven and oneDhal *ercent '".!B(. The de*ositor- +an< shallithhold and reit the ta1 *ursuant to Sections !" and !$ 'ithholdin ta1 at source( o theCode.

'2( I a +an< account is ;ointl- in the nae o a nonDresident citi@en such as an overseascontract orairs '3A( o the Phili**ines that theindividual is a reular e+er o the di*loatic cor*s o a orein overnent and is entitled toincoe ta1 e1e*tion under an international areeent to hich the Phili**ines is a sinator-.

'C( Nae o the 3orein Currenc- =an< Account To +e entitled to an e1e*tion ro the ta1

on interest incoe on orein currenc- de*osit, the 3orein Currenc- =an< Account shall +e in thenae o the nonDresident individual or nonDresident cor*oration. Otherise, the interest incoetherero shall +e considered as su+;ect to the ta1 i*osed herein.

'( Illustration.

Fr. /uan de la Cru@, a 3ili*ino citi@en ho is residin in the Phili**ines has a 5S dollar account ithA=C =an


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re8uireents:

'&( Certi6cate o reistration o the cor*oration a+road? and

'2( Certi6cation ro the Securities and 1chane Coission 'SC( that the nonDresidentcor*oration is not licensed to do +usiness in the Phili**ines. Cd*r

'C( Ta1ation o Incoe o an 3C5 or O=5 ro 3orein Currenc- Transactions. In eneral,incoe derived +- an 3C5 or an O=5 ro orein currenc- transactions ith residents o the

Phili**ines, includin local coercial +an


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con6dentialit- o orein currenc- de*osits, shall not +e entitled to the e1e*tion *rivilee.

33CTIJIT C9A5S. These Reulations shall a**l- on ta1a+le incoe derived +einnin /anuar-&, #$ *ursuant to the *rovisions o Section $ o RA $424. In case o de*osits hich ere adein #", onl- that *ortion o interest hich as actuall- or constructivel- received +- a de*ositorstartin /anuar- &, #$ is ta1a+le.

TRANSITOR PROJISION. No *enalt- shall +e i*osed or late *a-ent o the ta1 herein*rescri+ed or the 6rst three 8uarters o calendar -ear #$, *rovided, hoever, that theta1*a-ers corres*ondin ta1 returns or the said ta1a+le 8uarters are 6led and the ta1es due are*aid not later than Octo+er 2!, #$. cda


Secretar- o 3inance

Recoendin A**roval:

'SH.( =TEOJN 9. R5A9O



83/286


SUBJECT : Re+ene Regl)ti#n, Amen'ing e*tinent #*ti#n, #1 Re+eneRegl)ti#n, N#,. 33-9? )n' 2-98 Rel)ti+e t# t(e T)/ T*e)tment #n t(e S)le% T*)n,1e* #*E/"()nge #1 Re)l *#pe*t )n' 1#* t(i, *p#,e Re+i,ing t(e Time )n' l)"e #1)ment #1 t(e C)pit)l G)in, T)/ @e T(e*e#n


SCTION &. Sco*e. Pursuant to Section 244 o the Ta1 Code o #", in relation to Sections24'('&( and 2"'('!( o the sae Code , these Reulations are here+- *roulated aendin*ertinent *ortions o Revenue Reulations Nos. &&D#) and 2D#$ and other relevant reulationsand issuances reardin the ta1 treatent on the sale, transer or e1chane o real *ro*ert- andaendin or this *ur*ose the date and venue or the 6lin o ca*ital ains ta1 returns and*a-ent o ta1es due on transactions involvin real *ro*erties classi6ed as ca*ital assets andli


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=. 0here the seller7transeror is not ha+ituall-

enaed in the real estate +usiness ".!B

C. 0here the seller7transeror is e1e*t ro credita+le

ithholdin ta1 in accordance ith Section 2.!".!

o Revenue Reulations No. 2D#$ 1e*t

SCTION !. Tie and Place o Pa-ent o Credita+le 0ithholdin Ta1 . Credita+le ithholdinta1es deducted and ithheld +- the ithholdin aent7+u-er on the sale, transer or e1chane oreal *ro*ert- classi6ed as ordinar- asset, shall +e *aid +- the ithholdin aent7+u-er u*on 6lino the return ith the Authori@ed Aent =an< 'AA=( located ithin the Revenue istrict Ofce'RO( havin ;urisdiction over the *lace here the *ro*ert- +ein transerred is located ithinten '&( da-s olloin the end o the onth in hich the transaction occurred. Provided,hoever, that ta1es ithheld in ece+er shall +e 6led on or +eore /anuar- 2! o the olloin-ear.

SCTION ). Ta1 Clearance Certi6cate. 5*on *resentation o the Ca*ital Hains Ta1 Return orCredita+le 0ithholdin Ta1 Return ith a +an< validation evidencin ull *a-ent o the ca*italains ta1 or the credita+le ithholdin ta1 due on the sale, transer, +arter, e1chane or otherdis*osition o real *ro*ert- classi6ed as ca*ital or ordinar- asset, as the case a- +e, theRevenue istrict Ofcer 'RO( o the revenue district here the *ro*ert- +ein transerred islocated shall issue the corres*ondin Ta1 Clearance 'TC9( or Certi6cate Authori@in Reistration'CAR( or the reistration o the real *ro*ert- in avor o the transeree.

SCTION ". Re*ealin Clause. The *rovisions o an- revenue reulations, revenueeorandu order, revenue eorandu circular or another issuance o the =ureau oInternal Revenue inconsistent ith these Reulations are here+- re*ealed, aended, or odi6edaccordinl-. cdll

SCTION $. >ectivit- Clause. These Reulations shall taect 6teen '&!( da-s ater*u+lication in an- nes*a*er o eneral circulation.


Secretar- o 3inance

Recoendin A**roval:'SH.( =TEOJN 9. R5A9O



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RESI@ENTIAL @ECREE NO. 37


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'c( ver- doestic su+contractor shall deduct, ithhold and *a- the ta1 i*osed in Section 2o this ecree ro the salaries, aes, annuities, co*ensations, reunerations andeoluents *aid to its alien e*lo-ees in the sae anner and under the sae conditions as*rovided in Section !4 o the National Internal Revenue Code.

SCTION 4. Reistration

Revenue Etc for Income Taxation

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