QuestionsQuestions (BIR REVENUE REGULATIONS NO. 5-2008)
It provides further amendments to RR No. 2-98 and RR No. 3-98 regarding “de minimis benefits,” specifically clarifying which benefits are exempt from income tax on compensation and from fringe benefit tax (FBT).
RR No. 5-2008 is promulgated pursuant to Sections 4 and 244 in relation to Section 33 of the Tax Code of 1997.
RR No. 5-2008 amends Section 2.78.1(A)(3)(c) and (d) of RR No. 2-98, as last amended by RR No. 10-2000.
De minimis benefits of relatively small value are not subject to income tax on compensation and not subject to withholding tax on compensation income for both managerial and rank-and-file employees.
A rice subsidy of P1,500.00 or one (1) sack of 50 kg rice per month amounting to not more than P1,500.00 is considered de minimis.
It must not exceed P4,000.00 per annum.
RR No. 5-2008 amends Section 2.33(C) of RR No. 3-98, as last amended by RR No. 10-2000.
They are facilities or privileges of relatively small value, offered or furnished merely to promote the health, goodwill, contentment, or efficiency of employees.
Yes. The same threshold is used: P1,500.00 or one (1) sack of 50 kg rice per month amounting to not more than P1,500.00.
Uniform and clothing allowance not exceeding P4,000.00 per annum is treated as de minimis and generally not subject to FBT.
It includes a repealing clause stating that all existing rules or parts thereof inconsistent with its provisions are revoked, repealed, or modified accordingly.
The benefits apply to income earned starting the year 2008.
It takes effect after fifteen (15) days following its publication in any newspaper of general circulation.
Secretary of Finance Margarito B. Teves adopted it, and Commissioner of Internal Revenue Lilian B. Hefti recommended approval.
Check whether it is given merely to promote employee well-being/efficiency, and confirm the value does not exceed P1,500.00 per month (or equivalently one sack of 50 kg rice amounting to not more than P1,500.00).
Confirm it qualifies as a relatively small privilege intended to promote employee efficiency/well-being, and ensure it does not exceed P4,000.00 per annum.
For qualified benefits, there is generally no income tax on compensation and no withholding tax on compensation income, and for the FBT side, no fringe benefit tax is imposed.