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 Quezon CityJanuary 31, 2009
REVENUE REGULATIONS NO. ________
SUBJECT :
Implementing the Tax Provisions of Republic Act No.9505, Otherwise Known as the
“Personal Equity and Retirement Account (PERA) Act of 2008” 
TO :
All Internal Revenue Officers and Others Concerned
 
SECTION 1. Scope
.
- Pursuant to Section 244 of the National Internal RevenueCode of 1997, as amended, in relation to Sections 15 and 16 of R.A. No. 9505, otherwiseknown as the
“Personal Equity and Retirement Account (PERA) Act of 2008,”
theseRegulations are hereby promulgated to implement the tax provisions of the said Actthereby establishing uniform guidelines in the administration of tax privileges andincentives of the Contributors under the said law and provide for the rules onqualification and disqualification standards, as well as accreditation of Administrators, incoordination with the concerned Regulatory Authorities.
SEC. 2. Definition of Terms.
–
Unless the context otherwise requires, thefollowing terms shall have the following meanings for purposes of these Regulations, viz:
(a) “PERA Act” 
– shall refer to Republic Act No. 9505, otherwise known as thePersonal Equity and Retirement Account (PERA) Act of 2008.
(b) “PERA Rules” 
– shall refer to the rules and regulations implementing thePERA Act jointly promulgated by the Regulatory Authorities, namely, the BangkoSentral ng Pilipinas, Securities and Exchange Commission, the Office of the InsuranceCommission and the Bureau of Internal Revenue.
(c) “Personal Equity and Retirement Account (PERA)” 
– shall refer to anindividual’s provident personal savings and investment plan, which is a voluntaryretirement account established by and for the exclusive use and benefit of the Contributorfor the purpose of being invested solely in PERA investment products in the Philippines.
 
2
(d 
 ) “Qualified/Eligible PERA Investment Products
”
– shall refer to thefollowing:(1) a unit investment trust fund (UITF);(2) share of stock of mutual fund;(3) annuity contract;(4 insurance pension product;(5) pre-need pension plan;(6) shares of stock or other securities listed and traded in the local stock exchange;(7) exchange-traded bond; or(8) any other investment product or outlet which the concerned RegulatoryAuthority may allow for PERA purposes.To qualify as a PERA investment product, the product must be non-speculative,readily marketable, and with a track record of regular income payments to investors.Each specific product must be approved first by the concerned Regulatory Authority inaccordance with the provisions of the PERA Rules before the income or distributiontherefrom can be granted certain tax privileges and incentives by the BIR.
(e) “Maximum Qualified PERA Contributions” 
– shall refer to the investmentproducts duly approved by the concerned Regulatory Authority placed by the Contributorin his PERA, which had been qualified by the concerned Regulatory Authority and shallbe entitled to certain tax privileges and incentives if the amount contributed in cash, or itsequivalent in any convertible foreign currency at the prevailing rate at the time of theactual contribution,
 does not exceed P100,000
 
 per year
(if the Contributor is a residentFilipino citizen), or
 P200,000
 
 per year
(if the Contributor is an Overseas Filipino),provided that the PERA is withdrawn only after the Contributor becomes 55 years of ageand has made contributions for at least five (5) years.The Secretary of Finance may adjust the maximum contribution from time totime, taking into consideration the present value of the said maximum contribution usingthe Consumer Price Index as published by the National Statistics Office, fiscal position of the government and other pertinent factors.
(f) “Qualified PERA Assets” -
shall mean the aggregate qualified assets of theContributor in his PERA at any one time, including the cash funds and the PERAinvestment products into which they are invested and reinvested, and all the incomeearned therefrom. But no portion of the PERA assets may be assigned, alienated,
 
3pledged, encumbered, attached, garnished, seized or levied upon. PERA Assets shall bekept separate from the other assets of an Administrator/Custodian and shall not be part of the general assets of the Administrator/Custodian for purposes of insolvency
 nor
 
shall itbe considered assets of the Contributor for purposes of insolvency and estate taxes.
(g) “Early withdrawal” 
-
shall pertain to (i) any withdrawal of qualified PERAAssets prior to reaching the age of fifty-five (55) years or the death of the Contributor,except when the entire proceeds from such withdrawal are immediately transferred toanother PERA Investment Product and/or another Administrator; (ii) any withdrawal of PERA Assets before the Contributor has made at least five (5) annual contributions tohis PERA, except when the entire proceeds from such withdrawal are immediatelytransferred to another PERA Investment Product and/or another Administrator; or (iii) apremature termination as described in Section 13 hereof.
(h)
 
“Overseas Filipino” 
–
shall
 
refer to (1) an individual citizen of the Philippineswho is working or deriving income from abroad, including one who retained orreacquired his Philippine citizenship under R.A. No. 9225, otherwise known as the“
Citizenship Retention and Reacquisition Act of 2003”
; or (2) the legitimate spouse,whether or not said spouse is of Filipino ancestry, and the children of the OverseasFilipino, who have the capacity to contract and working or deriving income from abroad.
(i)
 
“Qualified Employer’s Contribution” 
 
– shall refer to the additionalcontribution made by the employer from the private sector to the PERA first establishedby his/its employees not to exceed the maximum amount allowable per year (i.e.,P100,000) to the employee-contributor.
Provided,
that the employer’s contribution tohis/its employee’s PERA shall not be used as a replacement to the employer’scontribution to the Social Security System (SSS) nor its obligation to pay retirementbenefits to its employees under the Labor Code. The total of the employer’s and theemployee’s contribution to his PERA and all the benefits, including tax incentives andprivileges arising therefrom, shall all
belong to the
 
employee
and shall not, in anyway,inure to the benefit of the employer. The employee also retains the prerogative to makeinvestment decisions pertaining to his PERA, including the contribution made in hisfavor by his employer.
(j) “Qualified PERA Investment Income” 
 
- shall refer to all the income earnedby the Contributor from his qualified PERA contributions, including income from hisemployer’s qualified contribution to his PERA, which shall be exempt from income tax,provided that such income shall be withdrawn only after the Contributor has made at leastfive (5) yearly contributions to his PERA and has reached the age of fifty-five (55) years.
(k)
 
“Qualified PERA Distribution” 
–
shall refer to the distribution of thequalified PERA contributions and/or the earnings arising therefrom, after makingcontributions for at least five (5) years and upon reaching the age of fifty-five (55) years.
SEC. 3. Participants to the PERA
.
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