Question & AnswerQ&A (BIR REVENUE REGULATIONS NO. 7-2010)
The regulations prescribe guidelines for income tax exemption, VAT exemption, and discount privileges to Senior Citizens, tax implications for their benefactors, and tax privileges for private entities employing Senior Citizens.
Any Filipino citizen who is a resident of the Philippines and is 60 years old or above, including dual citizens proving Filipino citizenship and at least 6 months residency.
Minimum wage earner Senior Citizens are exempt from income tax on compensation income, and those whose gross income does not exceed personal exemptions are exempt and need not file returns.
No, other taxes like 20% final withholding on interest income, capital gains tax, dividends withholding tax, and estate tax still apply.
A minimum discount of 20% on goods and services specified in the Act, with a minimum 5% discount on water and electricity for Senior Citizens.
All duly licensed or franchised public or private establishments supplying goods and services specified in the Act such as drug stores, hospitals, transportation, hotels, restaurants, recreation centers, cinemas, and funeral service providers.
A 20% discount and VAT exemption on purchase of generic or branded medicines, vaccines, essential medical supplies, medical and dental services, and professional fees of attending physicians and health workers.
Discounts are deductible as an expense from gross income for tax purposes, with gross sales and discounts separately indicated in official receipts, and total sales reported gross of the discount.
First violation: fines between P50,000 and P100,000 and imprisonment of 2 to 6 years. Subsequent violations: fines between P100,000 and P200,000 and imprisonment of 2 to 6 years. Abuse of privileges may result in fines and imprisonment of at least 6 months; aliens may be deported.
A Benefactor is any person providing care or assistance to a Senior Citizen dependent on them for primary support. They may claim a basic personal exemption of P50,000 when filing income tax returns for the dependent Senior Citizen.
They must submit a certified true copy of their OSCA-issued Senior Citizen ID to the local RDO, file a sworn statement that taxable income is below poverty level, and be listed in the RDO's Master List of Tax-Exempt Senior Citizens for the year.
A 20% discount and VAT exemption apply to fares on public land transportation (buses, jeepneys, taxis, rail transit) and domestic air and sea travel including advanced bookings.
No, the 20% discount applies only to personal consumption and cannot be applied to pre-contracted party packages or bulk orders.
The privilege must be personally availed of by the Senior Citizen. No authorization or proxies are allowed for discounts in dine-in or similar transactions.
The Senior Citizen employee must be employed for at least 6 months and have annual taxable income below the poverty level, supported by a sworn certification.