Question & AnswerQ&A (BIR REVENUE REGULATIONS NO. 8-2000)
The regulations amend certain sections of Revenue Regulations No. 2-98 and No. 3-98 to clarify benefits and privileges received by employees not considered as income, hence not subject to income tax and withholding tax, including de minimis benefits, ACA, RATA, and PERA.
De minimis benefits are facilities and privileges of relatively small value given by employers to employees to promote health, goodwill, contentment, or efficiency, which are not subject to income tax and withholding tax.
Examples include monetized unused vacation leave credits not exceeding 10 days/year, medical cash allowance up to P750/semester, rice subsidy up to P1,000/month, uniforms/clothing allowance up to P3,000/year, actual annual medical benefits up to P10,000, laundry allowance up to P300/month, employee achievement awards up to P10,000, gifts during Christmas up to P5,000/year, flowers/fruits/books on special occasions, and daily meal allowance for overtime not exceeding 25% of basic minimum wage.
No, amounts of de minimis benefits within the prescribed ceiling are not included in determining the P30,000 ceiling under Section 32(B)(7)(e) of the Tax Code.
The excess amount over the prescribed ceiling and beyond the P30,000 ceiling for other benefits shall be taxable to the employee receiving the benefits.
No, RATA granted under the General Appropriations Act and PERA, which essentially reimburses expenses incurred by government personnel in official duties, are not subject to income tax and withholding tax.
ACA given to government personnel is not subject to withholding tax pending its formal integration into basic pay and is classified as part of other benefits excluded from gross compensation income, provided total benefits do not exceed P30,000.
Yes, when compensation is paid in property, the employer must ensure the tax required to be withheld is paid to the Commissioner.
The expenses must be ordinary and necessary for the employee's duties, and the employee must liquidate such expenses per tax code requirements; reasonable advances or reimbursements need not be substantiated if pre-computed on a daily basis.
They take effect fifteen (15) days after publication in a newspaper of general circulation.