QuestionsQuestions (BIR REVENUE REGULATION NO. 8-93)
It is promulgated to implement the provisions of Section 8 (Chapter I, Title II) and Section 42 (Title IV) of RA 7277, pursuant to Section 245 in relation to Sections 29(a) and (h), 94, and 103(u) of the NIRC.
Private entities that employ disabled persons who meet the required skills or qualifications as regular employees, apprentices, or learners.
An additional deduction equivalent to 25% of the total amount paid as salaries and wages to disabled persons, over and above ordinary and necessary deductions for those salaries and wages.
(1) DOLE certification that the qualified disabled persons are under their employ during the taxable year, listing the employees’ full name, status, address, and TIN; and (2) a certification from DOLE and DOH as to the disability, skills, and qualifications of the disabled persons employed.
Evidence of actual payment of salaries and wages to the employed disabled person, as well as withholding tax, if any.
A 50% additional deduction from net taxable income for the taxable year equivalent to the direct costs of improvements/modifications, over and above total allowable ordinary and necessary business deductions for those costs.
Facilities improvements/modifications required under Batas Pambansa Blg. 344 are excluded.
It includes improvement of existing facilities to render them accessible and usable by disabled persons, and modifications such as work schedule changes, reassignment to vacant positions, adjustments to examinations/training materials/company policies, provision of auxiliary aids and services, and other similar accommodations.
Agencies of the national, local, and provincial government, including government-owned or controlled corporations.
Donations (donation, bequest, subsidy, or financial aid) to qualified government agencies and organizations of disabled persons are exempt from the donor’s tax subject to the NIRC rules (notably Section 94), and are allowed as deductions from the donor’s gross income for computing taxable income subject to the NIRC provisions on deductions (Section 29[h]).
Not more than 30% of the gifts/donations may be used by the donee for administration purposes.
Donations to qualified donees are deductible subject to limits: 6% of the donor’s taxable business income for individuals and 3% for corporate donors, computed without the benefit of the deduction.
When the organization is registered and accredited/certified as a donee institution by the BIR under BIR-NEDA regulations implementing NIRC Section 29(h)(2); then the donations are deductible in full from the donor’s taxable business income in the year made.
Donations in kind are determined at fair market value/zonal value as of the date of donation; cash donations are determined solely using the cash receipts and disbursements method of accounting.
For employers, in the taxable year in which the expenses for salaries/wages and/or the expenses for direct costs of improvements/modifications have been paid or incurred, unless a different period is required to clearly reflect income under the NIRC (Section 39).
Proof of employment of disabled persons certified by DOLE; certification from DOLE and DOH on disability/skills/qualifications; evidence of actual payment of salaries/wages (and withholding tax if any); and certified schedules/statements of actual direct costs for facility improvements/modifications (with examples such as specialized lifts, adapted vehicles, assistive devices, etc.).
They must keep books and accurate records; file annual information returns (with audited financial statements) by April 15 or the 4th month after end of taxable period; include reports on donations and activities/projects with utilization details; and comply with conditions preventing net income from inuring to private individuals.
Income from profit-making activities and passive investment income (e.g., interest on deposits, yields from deposit substitutes, trust fund income); royalties, prizes/winnings (with exceptions for small prizes and PCS winnings); and income from dealings in property (real and personal).