ANNOTATION: Revenue Regulations No.

03-98
Implementing Section 33 of the NIRC
1998
* Indirectly amends Revenue Regulations No. !98 "effective #anuary 1$
1998% Re& Implementing Repu'lic (ct No. 8))$ *(n (ct (mending +he National
Internal Revenue Code$ as (mended* Relative to the ,ithholding on Income
Su'-ect to the ./panded ,ithholding +a/ and 0inal ,ithholding +a/$ ,ithholding
of Income +a/ on Compensation$ ,ithholding of Credita'le 1alue!(dded +a/ and
2ther 3ercentage +a/es.
(mended 'y Revenue Regulations No. 8!444 "dated (ugust
1$ 444% Re& (mending Sections .58.1"(%"1%$ "(%"3%$ "(%"6%$ "(%"5%$ and "7%"11%
"'% of Revenue Regulations No. !98$ as (mended$ and Section .33"C% of
Revenue Regulations No. 3!98$ 8ith Respect to *9e :inimis* 7enefits$ (dditional
Compensation (llo8ance "(C(%$ Representation and +ransportation (llo8ance
"R(+(% and 3ersonal .conomic Relief (llo8ance "3.R(%; Revenue Regulations
No. 14!444 "dated 9ecem'er 1)$ 444% Re& 0urther (mendments to Revenue
Regulations No. !98 and 3!98$ as <ast (mended 'y Revenue Regulations No. 8!
44; Revenue Regulations No. )!44 "dated :arch 6$ 44% Re& (mending the
9ue 9ates for the 0iling Issuance of Certain 7IR +a/ Returns=0orms$ Clarifying
the 0orm +ype to 'e >sed on Certain +ransactions and 3rescri'ing Certain
(ttachments to Returns 0iled; and Revenue Regulations No. ?!448 "dated (pril
15$ 448% Re& 0urther (mendments to Revenue Regulations Nos. !98 and 3!98$
as <ast (mended 'y Revenue Regulations No. 14!444$ 8ith Respect to *9e
:inimis 7enefits*.
Revenue Regulations No. !98 8as further amended 'y
Revenue Regulations No. 6!441 "dated #uly 31$ 441% Re& (mending 3ertinent
3rovisions of Revenue Regulations Nos. 1!98$ !98$ as (mended$ and 5!9?$ as
(mended$ and Revenue :emorandum Circular No. 1!98 Relative to the Inclusion
of (dditional +a/payers to 'e Su'-ect to 0inal ,ithholding +a/$ Revision of the
,ithholding +a/ Rates on Certain Income 3ayments Su'-ect to Credita'le
,ithholding +a/$ +ime for the 0iling of 1arious +a/ Returns and 3ayment of the
+a/es 9ue +hereon (nd 2thers; Revenue Regulations No. 1!441 "dated
Septem'er 5$ 441% Re& (mendment to the 3ertinent 3rovisions of Revenue
Regulations No. 1!98$ as (mended$ Revenue Regulations No. !98$ as (mended$
and Revenue Regulations No. 6!441$ Relative to the Revision of ,ithholding +a/
Rates on Certain Income 3ayments Su'-ect to ,ithholding +a/$ the 9eferment of
the Ne8 9eadline 9ates 0or 0iling Selected +a/ Returns$ the Reporting
Re@uirements for Recipients of +alent 0ees$ and for 2ther 3urposes; and
Revenue Regulations No. ?!411 "issued :arch 16$ 411% Re& 0urther
(mendments to Revenue Regulations Nos. !98 and 3!98$ as <ast (mended 'y
Revenue Regulations No. ?!448$ 8ith Respect to *9e :inimis 7enefits*.
See Revenue :emorandum Circular No. 4!411 "issued :ay
13$ 411% Re& Special +reatment of 0ringe 7enefits under Section .33 of
Revenue Regulations No. 3!98$ as last amended 'y Revenue Regulations No. ?!
411; and Repu'lic (ct No. 8))$ as amended$ entitled *(n (ct (mending +he
National Internal Revenue Code$ (s (mended* "effective #anuary 1$ 1998%$
specifically$ Sections 33$ ?5"(%$ ?8"(%$ 58$ 59$ 84$ 81 and 83 of the NIRC of 1995.
See also Revenue Regulations No. 9!441 "dated (ugust 3$
441% Re& .lectronic 0iling of +a/ Returns and 3ayment of +a/es; Revenue
Regulations No. 15!41 "dated 2cto'er ?$ 441% Re& Revenue Regulations
Implementing the 3rovisions on Community :ortgage 3rogram "C:3% of Repu'lic
(ct No. 559$ other8ise Ano8n as the *>r'an 9evelopment and Bousing (ct of
199*; Revenue :emorandum 2rder No. 63!98 "dated #uly 13$ 1998% Re&
3rescri'ing the 0orm to 'e >sed in the Remittance of +a/es on 0ringe 7enefits;
Revenue :emorandum 2rder No. 8!441 "dated :arch 3$ 441% Re& Creation
and Renaming of (lphanumeric +a/ Codes "(+Cs% for 0ringe 7enefit +a/es;
Revenue :emorandum Circular No. 1?!85 "dated (pril 1$ 1985% Re& +a/ treatment
of su'sistence$ clothing and @uarters allo8ances paid to the personnel of the
(rmed 0orces of the 3hilippines "(03%; Revenue :emorandum Circular No. ?4!
9 "dated Novem'er ?$ 199% Re& +a/ +reatment of <oyalty Cash (8ard;
Revenue :emorandum Circular No. 1!95 "dated #une ?$ 1995% Re& ./emption
0rom +a/ of Certain 7enefits Cranted to the :em'ers of the 3hilippine National
3olice and +hose 7enefits Cranted to the :em'ers of the (rmed 0orces of the
3hilippines; Revenue :emorandum Circular No. ?!98 "dated #anuary $ 1998%
Re& 3rescri'ing the >se of the Revised ,ithholding +a/ +a'le Implementing
Section )"(%"1%"c% in Relation to Section 59 of Repu'lic (ct No. 8)); Revenue
:emorandum Circular No. )!99 "dated #anuary 5$ 1999% Re& 3rescri'ing the >se
of the Revised ,ithholding +a/ +a'le Implementing Section )"(%"1%"c% in Relation
to Section 59 of Repu'lic (ct No. 8)); Revenue :emorandum Circular No. 16!
444 "dated 2cto'er 16$ 444% Re& :onetiDation of <eave Credits of Covernment
2fficials and .mployees; Revenue :emorandum Circular No. 3!441 "dated
#anuary 13$ 441% Re& 9elegation of (uthority to Regional 9irectors to Issue
Certain Rulings 8ith .sta'lished 3recedents; Revenue :emorandum Circular No.
1)!441 "dated :arch 1$ 441% Re& <ists of Re@uirements from +a/payers for
Issuance of Certain Rulings 8ith .sta'lished 3recedents 9elegated to Regional
9irectors and to the (ssistant Commissioner$ <egal Service under R:C Nos. !
441$ 3!441 and 14!441; Revenue :emorandum Circular No. 3!441 "dated
:ay $ 441% Re& (n (ct ./empting from +a/ Certain (llo8ances and 7enefits
Cranted to the :em'ers of the (rmed 0orces of the 3hilippines; Revenue
:emorandum 2rder No. 3!44? "effective (ugust 15$ 44?% Re&
(udit=Investigation of ,ithholding +a/ <ia'ilities for +a/a'le Eears 443 and 44)
Including ,ithholding +a/ on 0ringe 7enefits; and Revenue (udit :emorandum
2rder No. 1!444 "dated :arch 15$ 444% Re& >pdated Band'ooA on (udit
3rocedures and +echni@ues 1olume I "Revision !Eear 444%; and ./ecutive 2rder
No. 19 entitled *Crant 2f Salary (d-ustment +o (ll Covernment 3ersonnel*
"effective #anuary 1$ 444%.
See liAe8ise$ ./ecutive 2rder No. 91 entitled *:onetiDation 2f
<eave Credits 2f Covernment 2fficials (nd .mployees* "effective Septem'er 5$
444%; Repu'lic (ct No. 88 entitled *(n (ct 0urther Strengthening +he Social
Security System +here'y (mending 0or +his 3urpose Repu'lic (ct No. 1161$ (s
(mended$ 2ther8ise Fno8n (s +he Social Security <a8* "dated :ay 1$ 1995%;
and Repu'lic (ct No. 891 entitled *(n (ct (mending 3residential 9ecree No.
11)6$ (s (mended$ ./panding (nd Increasing +he Coverage (nd 7enefits 2f +he
Covernment Service Insurance System$ Instituting Reforms +herein (nd 0or
2ther 3urposes* "dated :ay 34$ 1995%.
See issuances on R(+( and 3.R( G Revenue :emorandum
Circular No. 64!91 "dated #uly 9$ 1991% Re& +a/ +reatment of Representation and
+ransportation (llo8ances "R(+(% granted to pu'lic officer or employee under the
Ceneral (ppropriations (ct; Revenue :emorandum Circular No. 68!91 "issued
#uly 6$ 1991% Re& Crant of 3ersonnel .conomic Relief (llo8ance "3.R(% +o (ll
.mployees 2f +he Covernment; Revenue :emorandum Circular No. 1?!9
"dated :arch 11$ 199% Re& +a/ +reatment of 3ersonnel .conomic Relief
(llo8ance "3.R(%; Revenue :emorandum Circular No. )6!9 "dated 2cto'er $
199% Re& Recomputation of Income +a/ for 1991 for purposes of the credit=refund
of e/cess 8ithholding ta/; and Revenue :emorandum Circular No. 1!9? "issued
#anuary 18$ 199?% Re& Second Eear Implementation 2f +he Ne8 Salary Schedule
In +he Covernment.
FULL TEXT: REV RE 03-98
:ay 1$ 1998 #anuary 1$ 1998
R.1.N>. R.C><(+I2NS N2. 43!98
S>7#.C+ & Implementing Section 33 of the National Internal
Revenue Code$ as (mended 'y Repu'lic (ct No. 8)) Relative to the Special
+reatment of 0ringe 7enefits
+2 & (ll Internal Revenue 2fficers and 2thers Concerned
3ursuant to Section ))$ in relation to Section 33 of the National Internal Revenue
Code of 1995 $ these Regulations are here'y promulgated to govern the collection
at source of the ta/ on fringe 'enefits 8hich have 'een furnished$ granted or paid
'y the employer 'eginning #anuary 1$ 1998. cda
S.C+I2N .33. S3.CI(< +R.(+:.N+ 20 0RINC. 7.N.0I+S
"(% Imposition of 0ringe 7enefits +a/ G ( final 8ithholding ta/ is here'y
imposed on the grossed!up monetary value of fringe 'enefit furnished$ granted or
paid 'y the employer to the employee$ e/cept ranA and file employees as defined
in these Regulations$ 8hether such employer is an individual$ professional
partnership or a corporation$ regardless of 8hether the corporation is ta/a'le or
not$ or the government and its instrumentalities e/cept 8hen& "1% the fringe 'enefit
is re@uired 'y the nature of or necessary to the trade$ 'usiness or profession of
the employer; or "% 8hen the fringe 'enefit is for the convenience or advantage of
the employer. +he fringe 'enefit ta/ shall 'e imposed at the follo8ing rates&
.ffective #anuary 1$ 1998 ! 3)H
.ffective #anuary 1$ 1999 ! 33H
.ffective #anuary 1$ 444 ! 3H
+he ta/ imposed under Sec. 33 of the Code shall 'e treated as a final income ta/
on the employee 8hich shall 'e 8ithheld and paid 'y the employer on a calendar
@uarterly 'asis as provided under Sec. ?5 "(% ",ithholding of 0inal +a/ on certain
Incomes% and Sec. ?8 ( "Iuarterly Returns and 3ayments of +a/es ,ithheld% of
the Code.
+he grossed!up monetary value of the fringe 'enefit shall 'e determined 'y
dividing the monetary value of the fringe 'enefit 'y the follo8ing percentages and
in accordance 8ith the follo8ing schedule&
.ffective #anuary 1$ 1998 ! 66H
.ffective #anuary 1$ 1999 ! 65H
.ffective #anuary 1$ 444 ! 68H
+he grossed!up monetary value of the fringe 'enefit represents the 8hole amount
of income realiDed 'y the employee 8hich includes the net amount of money or
net monetary value of property 8hich has 'een received plus the amount of fringe
'enefit ta/ thereon other8ise due from the employee 'ut paid 'y the employer for
and in 'ehalf of his employee$ pursuant to the provisions of this Section.
Coverage G +hese Regulations shall cover only those fringe 'enefits given or
furnished to managerial or supervisory employees and not to the ranA and file.
+he term$ *R(NF (N9 0I<. .:3<2E..S* means all employees 8ho are holding
neither managerial nor supervisory position. +he <a'or Code of the 3hilippines$
as amended$ defines *managerial employee* as one 8ho is vested 8ith po8ers or
prerogatives to lay do8n and e/ecute management policies and=or to hire$
transfer$ suspend$ lay!off$ recall$ discharge$ assign or discipline employees.
*Supervisory employees* are those 8ho$ in the interest of the employer$ effectively
recommend such managerial actions if the e/ercise of such authority is not merely
routinary or clerical in nature 'ut re@uires the use of independent -udgment. cdtai
:oreover$ these regulations do not cover those 'enefits properly forming part of
compensation income su'-ect to 8ithholding ta/ on compensation in accordance
8ith Revenue Regulations No. !98.
0ringe 'enefits 8hich have 'een paid prior to #anuary 1$ 1998 shall not 'e
covered 'y these Regulations.
9etermination of the (mount Su'-ect to the 0ringe 7enefit +a/ G In general$ the
computation of the fringe 'enefits ta/ 8ould entail "a% valuation of the 'enefit
granted and "'% determination of the proportion or percentage of the 'enefit 8hich
is su'-ect to the fringe 'enefit ta/. +hat the +a/ Code allo8s for the cases 8here
only a portion "i.e. less than 144 per cent% of the fringe 'enefit is su'-ect to the
fringe 'enefit ta/ is clearly stated in Section 33 "a% of R.(. 8)) 8hich stipulates
that fringe 'enefits 8hich are *re@uired 'y the nature of$ or necessary to the trade$
'usiness or profession of the employer$ or 8hen the fringe 'enefit is for the
convenience or advantage of the employer* are not su'-ect to the fringe 'enefit
ta/. +hus$ in cases 8here the fringe 'enefits entail -oint 'enefits to the employer
and employee$ the portion 8hich shall 'e su'-ect to the fringe 'enefits ta/ and the
guidelines for the valuation of fringe 'enefits are defined under these rules and
regulations.
>nless other8ise provided in these regulations$ the valuation of fringe 'enefits
shall 'e as follo8s&
"1% If the fringe 'enefit is granted in money$ or is directly paid for 'y the
employer$ then the value is the amount granted or paid for.
"% If the fringe 'enefit is granted or furnished 'y the employer in property
other than money and o8nership is transferred to the employee$ then the value of
the fringe 'enefit shall 'e e@ual to the fair marAet value of the property as
determined in accordance 8ith Sec. 6 ".% of the Code "(uthority of the
Commissioner to 3rescri'e Real 3roperty 1alues%.
"3% If the fringe 'enefit is granted or furnished 'y the employer in property
other than money 'ut o8nership is not transferred to the employee$ the value of
the fringe 'enefit is e@ual to the depreciation value of the property.
+a/ation of fringe 'enefit received 'y a non!resident alien individual 8ho is not
engaged in trade or 'usiness in the 3hilippines G ( fringe 'enefit ta/ of t8enty!
five percent "?H% shall 'e imposed on the grossed!up monetary value of the
fringe 'enefit. +he said ta/ 'ase shall 'e computed 'y dividing the monetary
value of the fringe 'enefit 'y seventy!five per cent "5?H%.
+a/ation of fringe 'enefit received 'y "1% an alien individual employed 'y regional
or area head@uarters of a multinational company or 'y regional operating
head@uarters of a multinational company; "% an alien individual employed 'y an
offshore 'anAing unit of a foreign 'anA esta'lished in the 3hilippines; "3% an alien
individual employed 'y a foreign service contractor or 'y a foreign service
su'contractor engaged in petroleum operations in the 3hilippines; and ")% any of
their 0ilipino individual employees 8ho are employed and occupying the same
position as those occupied or held 'y the alien employees. G ( fringe 'enefit ta/
of fifteen per cent "1?H% shall 'e imposed on the grossed!up monetary value of
the fringe 'enefit. +he said ta/ 'ase shall 'e computed 'y dividing the monetary
value of the fringe 'enefit 'y eighty!five per cent "8?H%. cdrep
+a/ation of fringe 'enefit received 'y employees in special economic Dones G
0ringe 'enefits received 'y employees in special economic Dones$ including ClarA
Special .conomic Jone and Su'ic Special .conomic and 0ree +rade Jone$ are
also covered 'y these regulations and su'-ect to the normal rate of fringe 'enefit
ta/ or the special rates of ?H or 1?H as provided a'ove.
"7% 9efinition of 0ringe 7enefit G In general$ e/cept as other8ise provided
under these regulations$ for purposes of this Section$ the term *0RINC.
7.N.0I+* means any good$ service$ or other 'enefit furnished or granted 'y an
employer in cash or in Aind$ in addition to 'asic salaries$ to an individual employee
"e/cept ranA and file employee as defined in these regulations% such as$ 'ut not
limited to the follo8ing&
"1% Bousing;
"% ./pense account;
"3% 1ehicle of any Aind;
")% Bousehold personnel$ such as maid$ driver and others;
"?% Interest on loan at less than marAet rate to the e/tent of the difference
'et8een the marAet rate and actual rate granted;
"6% :em'ership fees$ dues and other e/penses 'orne 'y the employer for
the employee in social and athletic clu's or other similar organiDations;
"5% ./penses for foreign travel;
"8% Boliday and vacation e/penses;
"9% .ducational assistance to the employee or his dependents; and
"14% <ife or health insurance and other non!life insurance premiums or similar
amounts in e/cess of 8hat the la8 allo8s.
0or this purpose$ the guidelines for valuation of specific types of fringe 'enefits
and the determination of the monetary value of the fringe 'enefits are give 'elo8.
+he ta/a'le value shall 'e the grossed!up monetary value of the fringe 'enefit.
"1% Bousing privilege G
"a% If the employer leases a residential property for the use of his employee
and the said property is the usual place of residence of the employee$ the value of
the 'enefit shall 'e the amount of rental paid thereon 'y the employer$ as
evidenced 'y the lease contract. +he monetary value of the fringe 'enefit shall 'e
fifty per cent "?4H% of the value of the 'enefit.
"'% If the employer o8ns a residential property and the same is assigned for
the use of his employee as his usual place of residence$ the annual value of the
'enefit shall 'e five per cent "?H% of the marAet value of the land and
improvement$ as declared in the Real 3roperty +a/ 9eclaration 0orm$ or Donal
value as determined 'y the Commissioner pursuant to Section 6".% of the Code
"(uthority of the Commissioner to 3rescri'e Real 3roperty 1alues%$ 8hichever is
higher. +he monetary value of the fringe 'enefit shall 'e fifty per cent "?4H% of the
value of the 'enefit. cda
+he monetary value of the housing fringe 'enefit is e@uivalent to the follo8ing&
:1 K L?H"0:1 or J2N(< 1(<>.M N ?4H
,B.R.&
:1 K :2N.+(RE 1(<>.
0:1 K 0(IR :(RF.+ 1(<>.
"c% If the employer purchases a residential property on installment 'asis and
allo8s his employee to use the same as his usual place of residence$ the annual
value of the 'enefit shall 'e five per cent "?H% of the ac@uisition cost$ e/clusive of
interest. +he monetary value of fringe 'enefit shall 'e fifty per cent "?4H% of the
value of the 'enefit.
"d% If the employer purchases a residential property and transfers o8nership
thereof in the name of the employee$ the value of the 'enefit shall 'e the
employerOs ac@uisition cost or Donal value as determined 'y the Commissioner
pursuant to Section 6".% of the Code "(uthority of the Commissioner to 3rescri'e
Real 3roperty 1alues%$ 8hichever is higher. +he monetary value of the fringe
'enefit shall 'e the entire value of the 'enefit.
"e% If the employer purchases a residential property and transfers o8nership
thereof to his employee for the latterOs residential use$ at a price less than the
employerOs ac@uisition cost$ the value of the 'enefit shall 'e the difference
'et8een the fair marAet value$ as declared in the Real 3roperty +a/ 9eclaration
0orm$ or Donal value as determined 'y the Commissioner pursuant to Sec. 6".% of
the Code "(uthority of the Commissioner to 3rescri'e Real 3roperty 1alues%$
8hichever is higher$ and the cost to the employee. +he monetary value of the
fringe 'enefit shall 'e the entire value of the 'enefit.
"f% Bousing privilege of military officials of the (rmed 0orces of the
3hilippines "(03% consisting of officials of the 3hilippine (rmy$ 3hilippine Navy
and 3hilippine (ir 0orce shall not 'e treated as ta/a'le fringe 'enefit in
accordance 8ith the e/isting doctrine that the State shall provide its soldiers 8ith
necessary @uarters 8hich are 8ithin or accessi'le from the military camp so that
they can 'e readily on call to meet the e/igencies of their military service.
"g% ( housing unit 8hich is situated inside or ad-acent to the premises of a
'usiness or factory shall not 'e considered as a ta/a'le fringe 'enefit. ( housing
unit is considered ad-acent to the premises of the 'usiness if it is located 8ithin
the ma/imum of fifty "?4% meters from the perimeter of the 'usiness premises.
"h% +emporary housing for an employee 8ho stays in a housing unit for three
"3% months or less shall not 'e considered a ta/a'le fringe 'enefit. cdasia
"% ./pense account G
"a% In general$ e/penses incurred 'y the employee 'ut 8hich are paid 'y his
employer shall 'e treated as ta/a'le fringe 'enefits$ e/cept 8hen the
e/penditures are duly receipted for and in the name of the employer and the
e/penditures do not partaAe the nature of a personal e/pense attri'uta'le to the
employee.
"'% ./penses paid for 'y the employee 'ut reim'ursed 'y his employer shall
'e treated as ta/a'le 'enefits e/cept only 8hen the e/penditures are duly
receipted for and in the name of the employer and the e/penditures do not
partaAe the nature of a personal e/pense attri'uta'le to the said employee.
"c% 3ersonal e/penses of the employee "liAe purchases of groceries for the
personal consumption of the employee and his family mem'ers% paid for or
reim'ursed 'y the employer to the employee shall 'e treated as ta/a'le fringe
'enefits of the employee 8hether or not the same are duly receipted for in the
name of the employer.
"d% Representation and transportation allo8ances 8hich are fi/ed in
amounts and are regular received 'y the employees as part of their monthly
compensation income shall not 'e treated as ta/a'le fringe 'enefits 'ut the same
shall 'e considered as ta/a'le compensation income su'-ect to the ta/ imposed
under Sec. ) of the Code.
"3% :otor vehicle of any Aind G
"a% If the employer purchases the motor vehicle in the name of the
employee$ the value of the 'enefit is the ac@uisition cost thereof. +he monetary
value of the fringe 'enefit shall 'e the entire value of the 'enefit$ regardless of
8hether the motor vehicle is used 'y the employee partly for his personal purpose
and partly for the 'enefit of his employer.
"'% If the employer provides the employee 8ith cash for the purchase of a
motor vehicle$ the o8nership of 8hich is placed in the name of the employee$ the
value of the 'enefits shall 'e the amount of cash received 'y the employee. +he
monetary value of the fringe 'enefit shall 'e the entire value of the 'enefit
regardless of 8hether the motor vehicle is used 'y the employee partly for his
personal purpose and partly for the 'enefit of his employer$ unless the same 8as
su'-ected to a 8ithholding ta/ as compensation income under Revenue
Regulations No. !98.
"c% If the employer purchases the car on installment 'asis$ the o8nership of
8hich is placed in the name of the employee$ the value of the 'enefit shall 'e the
ac@uisition cost e/clusive of interest$ divided 'y five "?% years. +he monetary
value of the fringe 'enefit shall 'e the entire value of the 'enefit regardless of
8hether the motor vehicle is used 'y the employee partly for his personal purpose
and partly for the 'enefit of his employer.
"d% If the employer shoulders a portion of the amount of the purchase price
of a motor vehicle the o8nership of 8hich is placed in the name of the employee$
the value of the 'enefit shall 'e the amount shouldered 'y the employer. +he
monetary value of the fringe 'enefit shall 'e the entire value of the 'enefit
regardless of 8hether the motor vehicle is used 'y the employee partly for his
personal purpose and partly for the 'enefit of his employer. Cdpr
"e% If the employer o8ns and maintains a fleet of motor vehicles for the use
of the 'usiness and the employees$ the value of the 'enefit shall 'e the
ac@uisition cost of all the motor vehicles not normally used for sales$ freight$
delivery service and other non!personal used divided 'y five "?% years. +he
monetary value of the fringe 'enefit shall 'e fifty per cent "?4H% of the value of the
'enefit.
+he monetary value of the motor vehicle fringe 'enefit is e@uivalent to the
follo8ing&
:1 K L"(%=?M N ?4H
8here&
:1 K :onetary value
( K ac@uisition cost
"f% If the employer leases and maintains a fleet of motor vehicles for the use
of the 'usiness and the employees$ the value of the 'enefit shall 'e the amount of
rental payments for motor vehicles not normally used for sales$ freight$ delivery$
service and other non!personal use. +he monetary value of the fringe 'enefit shall
'e fifty per cent "?4H% of the value of the 'enefit.
"g% +he use of aircraft "including helicopters% o8ned and maintained 'y the
employer shall 'e treated as 'usiness use and not 'e su'-ect to the fringe
'enefits ta/.
"h% +he use of yacht 8hether o8ned and maintained or leased 'y the
employer shall 'e treated as ta/a'le fringe 'enefit. +he value of the 'enefit shall
'e measured 'ased on the depreciation of a yacht at an estimated useful life of 4
years.
")% Bousehold e/penses G ./penses of the employee 8hich are 'orne 'y
the employer for household personnel$ such as salaries of household help$
personal driver of the employee$ or other similar personal e/penses "liAe payment
for homeo8ners association dues$ gar'age dues$ etc.% shall 'e treated as ta/a'le
fringe 'enefits.
"?% Interest on loan at less than marAet rate
"a% If the employer lends money to his employee free of interest or at a rate
lo8er than t8elve per cent "1H%$ such interest foregone 'y the employer or the
difference of the interest assumed 'y the employee and the rate of t8elve per
cent "1H% shall 'e treated as a ta/a'le fringe 'enefit.
"'% +he 'enchmarA interest rate of t8elve per cent "1H% shall remain in
effect until revised 'y a su'se@uent regulation.
"c% +his regulation shall apply to installment payments or loans 8ith interest
rate lo8er than t8elve per cent "1H% starting #anuary 1$ 1998. prcd
"6% :em'ership fees$ dues$ and other e/penses 'orne 'y the employer for
his employee$ in social and athletic clu's or other similar organiDations. G +hese
e/penditures shall 'e treated as ta/a'le fringe 'enefits of the employee in full.
"5% ./penses for foreign travel G
"a% Reasona'le 'usiness e/penses 8hich are paid for 'y the employer for
the foreign travel of his employee for the purpose of attending 'usiness meetings
or conventions shall not 'e treated as ta/a'le fringe 'enefits. In this instance$
inland travel e/penses "such as e/penses for food$ 'everages and local
transportation% e/cept lodging cost in a hotel "or similar esta'lishments%
amounting to an average of >SP344.44 or less per day$ shall not 'e su'-ect to a
fringe 'enefit ta/. +he e/penses should 'e supported 'y documents proving the
actual occurrences of the meetings or conventions.
+he cost of economy and 'usiness class airplane ticAet shall not 'e su'-ect to a
fringe 'enefit ta/. Bo8ever$ 34 percent of the cost of first class airplane ticAet shall
'e su'-ect to a fringe 'enefit ta/.
"'% In the a'sence of documentary evidence sho8ing that the employeeOs
travel a'road 8as in connection 8ith 'usiness meetings or conventions$ the entire
cost of the ticAet$ including cost of hotel accommodations and other e/penses
incident thereto shouldered 'y the employer$ shall 'e treated as ta/a'le fringe
'enefits. +he 'usiness meetings shall 'e evidenced 'y official communications
from 'usiness associates a'road indicating the purpose of the meetings.
7usiness conventions shall 'e evidenced 'y official invitations=communications
from the host organiDation or entity a'road. 2ther8ise$ the entire cost thereof
shouldered 'y the employer shall 'e treated as ta/a'le fringe 'enefits of the
employee.
"c% +ravelling e/penses 8hich are paid 'y the employer for the travel of the
family mem'ers of the employee shall 'e treated as ta/a'le fringe 'enefits of the
employee.
"8% Boliday and vacation e/penses G Boliday and vacation e/penses of the
employee 'orne 'y his employer shall 'e treated as ta/a'le fringe 'enefits.
"9% .ducational assistance to the employee or his dependents G
"a% +he cost of the educational assistance to the employee 8hich are 'orne
'y the employer shall$ in general$ 'e treated as ta/a'le fringe 'enefit. Bo8ever$ a
scholarship grant to the employee 'y the employer shall not 'e treated as ta/a'le
fringe 'enefit if the education or study involved is directly connected 8ith the
employerOs trade$ 'usiness or profession$ and there is a 8ritten contract 'et8een
them that the employee is under o'ligation to remain in the employ of the
employer for period of time that they have mutually agreed upon. In this case$ the
e/penditure shall 'e treated as incurred for the convenience and furtherance of
the employerOs trade or 'usiness.
"'% +he cost of educational assistance e/tended 'y an employer to the
dependents of an employee shall 'e treated as ta/a'le fringe 'enefits of the
employee unless the assistance 8as provided through a competitive scheme
under the scholarship program of the company. cda
"14% <ife or health insurance and other non!life insurance premiums or similar
amounts in e/cess of 8hat the la8 allo8s G +he cost of life or health insurance
and other non!life insurance premiums 'orne 'y the employer for his employee
shall 'e treated as ta/a'le fringe 'enefit$ e/cept the follo8ing& "a% contri'utions of
the employer for the 'enefit of the employee$ pursuant to the provisions of e/isting
la8$ such as under the Social Security System "SSS%$ "R.(. No. 88$ as
amended % or under the Covernment Service Insurance System "CSIS% "R.(. No.
891 %$ or similar contri'utions arising from the provisions of any other e/isting
la8; and "'% the cost of premiums 'orne 'y the employer for the group insurance
of his employees.
"C% 0ringe 7enefits Not Su'-ect to 0ringe 7enefits +a/ G In general$ the
fringe 'enefits ta/ shall not 'e imposed on the follo8ing fringe 'enefits&
"1% 0ringe 'enefits 8hich are authoriDed and e/empted from income ta/
under the Code or under any special la8;
"% Contri'utions of the employer for the 'enefit of the employee to
retirement$ insurance and hospitaliDation 'enefit plans;
"3% 7enefits given to the ranA and file$ 8hether granted under a collective
'argaining agreement or not;
")% 9e minimis 'enefits as defined in these Regulations;
"?% If the grant of fringe 'enefits to the employee is re@uired 'y the nature of$
or necessary to the trade$ 'usiness or profession of the employer; or
"6% If the grant of the fringe 'enefit is for the convenience of the employer.
+he e/emption of any fringe 'enefit from the fringe 'enefit ta/ imposed under this
Section shall not 'e interpreted to mean e/emption from any other income ta/
imposed under the Code e/cept if the same is liAe8ise e/pressly e/empt from any
other income ta/ imposed under the Code or under any other e/isting la8. +hus$ if
the fringe 'enefit is e/empted from the fringe 'enefits ta/$ the same may$
ho8ever$ still form part of the employeeOs gross compensation income 8hich is
su'-ect to income ta/$ hence$ liAe8ise su'-ect to a 8ithholding ta/ on
compensation income payment.
+he term *9. :INI:IS* 'enefits 8hich are e/empt from the fringe 'enefit ta/
shall$ in general$ 'e limited to facilities or privileges furnished or offered 'y an
employer to his employees that are of relatively small value and are offered or
furnished 'y the employer merely as a means of promoting the health$ good8ill$
contentment$ or efficiency of his employees such as the follo8ing&
"1% :onetiDed unused vacation leave credits of employees not e/ceeding
ten "14% days during the year ;
"% :edical cash allo8ance to dependents of employees not e/ceeding
35?4 per semester or 31? per month ;
"3% Rice su'sidy of 33?4 per month granted 'y an employer to his
employees ;
")% >niforms given to employees 'y the employer ;
"?% :edical 'enefits given to the employees 'y the employer ;
"6% <aundry allo8ance of 31?4 per month ;
"5% .mployee achievement a8ards$ e.g. for length of service or safety
achievement$ 8hich must 'e in the form of a tangi'le personal property other than
cash or gift certificate$ 8ith an annual monetary value not e/ceeding one!half "1=%
month of the 'asic salary of the employee receiving the a8ard under an
esta'lished 8ritten plan 8hich does not discriminate in favor of highly paid
employees ; dctai
"8% Christmas and ma-or anniversary cele'rations for employees and their
guests ;
"9% Company picnics and sports tournaments in the 3hilippines and are
participated e/clusively 'y employees ; and
"14% 0lo8ers$ fruits$ 'ooAs or similar items given to employees under special
circumstances$ e.g. on account of illness$ marriage$ 'irth of a 'a'y$ etc. .
"9% +a/ (ccounting for the 0ringe 7enefit 0urnished to the .mployee and the
0ringe 7enefit +a/ 9ue +hereon. G (s a general rule$ the amount of ta/a'le
fringe 'enefit and the fringe 'enefits ta/ shall constitute allo8a'le deductions from
gross income of the employer. Bo8ever$ if the 'asis for computation of the fringe
'enefits ta/ is the depreciation value$ the Donal value as determined 'y the
Commissioner pursuant to Section 6".% of the Code or the fair marAet value as
determined in the current real property ta/ declaration of a certain property$ only
the actual fringe 'enefits ta/ paid shall constitute a deducti'le e/pense for the
employer. +he value of the fringe 'enefit shall not 'e deducti'le and shall 'e
presumed to have 'een tacAed on or actually claimed as depreciation e/pense 'y
the employer.
3rovided$ ho8ever$ that if the aforesaid Donal value or fair marAet value of the said
property is greater than its cost su'-ect to depreciation$ the e/cess amount shall
'e allo8ed as a deduction from the employerOs gross income as fringe 'enefit
e/pense.
Illustrations on fringe 'enefit furnished or granted 'y the employer to an employee
"other than a ranA!and!file employee%
"1% 9uring the year 1998$ (7C Corporation paid for the monthly rental of a
residential house of its 'ranch manager ":r. 9ela CruD% amounting to 366$444.44.
In this case$ the monthly ta/a'le grossed!up monetary value of the said fringe
'enefit furnished or granted to its 'ranch manager ":r. 9ela CruD% shall 'e
3?4$444.44$ computed as follo8s&
:onthly rental for the residential house 366$444.44
Crossed!up monetary 'enefit granted
"366$444.44 divided 'y 66H factor for
calendar year 1998 times ?4H ta/a'le portion% 3?4$444.44
GGGQQQQ
0ringe 'enefit ta/ due thereon "3)H% 315$444.44
KKKKKKKKK
(7C Corporation shall taAe up in its 'ooAs of accounts the 366$444.44 fringe
'enefit furnished to :r. 9ela CruD$ under account title *0ringe 7enefit ./pense*
and the amount of 15$444.44 under the account title *0ringe 7enefit +a/ ./pense*.
+he aforesaid amounts shall 'e fully allo8ed as deductions from the gross income
of (7C Corporation and shall 'e taAen up in the said employerOs 'ooAs of
accounts as follo8s&
9e'it& 0ringe 7enefit ./pense 366$444
9e'it& 0ringe 7enefit +a/ ./pense 315$444
Credit& Cash 383$444
+o record fringe 'enefit e/pense and fringe 'enefit ta/ paid on rental of the
residential property furnished to :r. 9ela CruD for his residential use. "Note& If the
fringe 'enefit e/pense of 366$444.44 has already accrued 'ut not yet paid$ use
the account title *fringe 'enefit paya'le*. If the fringe 'enefit ta/ has already
accrued 'ut not yet paid$ use the account title *fringe 'enefit ta/ paya'le*%.
"% NEJ Corporation o8ns a condominium unit. 9uring the year 1998$ the
said corporation furnished and granted the said property for the residential use of
its (ssistant 1ice!3resident. +he fair marAet value of the said property as
determined 'y the Commissioner pursuant to Section 6".% of the Code amounts
314$444$444.44 8hile its fair marAet value as sho8n in its current Real 3roperty
+a/ 9eclaration amounts to 38$444$444.44. In this case$ the higher fair marAet
value of 314$444$444.44 as determined 'y the Commissioner shall 'e used in
computing the monetary of the fringe 'enefit so furnished or granted to said
employee and the fringe 'enefit ta/ due thereon shall 'e computed as follo8s&
:onthly rental value of the property
"314$444$444 times ?H thereof times ?4H
divided 'y 1 months% 34$833.33
Crossed!up monetary value thereof as fringe
'enefit "34$833.33 divided 'y 66H factor for
calendar year 1998% 331$?6?.66
0ringe 7enefit ta/ due thereon "3)H% 314$53.3
KKKKKKKKK
In general$ under this illustration$ the NEJ Corporation shall not further claim
deduction for allo8ing its (ssistant 1ice!3resident the use of its residential
property since the cost for the use thereof has already 'een recovered as
deduction from its gross income under *9epreciation ./pense*. Bo8ever$ since
the fringe 'enefit ta/ in the amount of 314$53.3$ assumed and paid 'y NEJ
corporation has not as yet 'een recovered 'y 8ay of deduction from gross
income$ the same shall 'e allo8ed as a deduction from its gross income. NEJ
Corporation shall taAe up the foregoing in its 'ooAs of accounts$ as follo8s&
9e'it& 0ringe 7enefit +a/ ./pense 314$53.3
Credit& Cash=0ringe 7enefit +a/ 3aya'le 314$53.3
+o record fringe 'enefit ta/ e/pense for the
residential property furnished to employees.
Bo8ever$ if the cost of the aforesaid condominium unit su'-ect to depreciation
allo8ance "e/ample& its ac@uisition cost is only 35$444$444.44% is lesser than its
fair marAet value as determined 'y the Commissioner "i.e. 314$444$444.44%$ the
e/cess amount "i.e. 33$444$444.44% shall 'e amortiDed throughout the remaining
estimated useful life of the residential property used in computing the said
employerOs depreciation e/pense and allo8ed as a deduction from the said
employerOs gross income as fringe 'enefit e/pense. +hus$ if the remaining
estimated useful life thereof during the year 1998 is fifteen "1?% years$ its monthly
amortiDation shall 'e computed as follo8s&
:onthly amortiDation "33$444$444.44 divided 'y
1? years divided 'y 1 months% 316$666.65
In this case$ NEJ Corporation shall taAe up the foregoing in its 'ooAs of accounts
as follo8s&
9e'it& 0ringe 'enefit e/pense 316$666.65
9e'it& 0ringe 'enefit ta/ 314$53.3
Credit& Income constructively realiDed 316$666.65
Credit& Cash=0ringe 'enefit ta/ paya'le 314$53.3
+o record fringe 'enefit and fringe 'enefit ta/ e/penses and income constructively
realiDed from the use of company!o8ned residential property furnished to
employees.
R.3.(<INC C<(>S. G (ll e/isting rules and regulations or parts thereof 8hich
are inconsistent 8ith the provisions of these regulations are here'y revoAed.
<i'<e/
.00.C+I1I+E G +hese regulations shall taAe effect on fringe 'enefits furnished$
granted or paid 'eginning #anuary 1$ 1998.
+R(NSI+2RE 3R21ISI2NS G No penalty shall 'e imposed for late payment of
the fringe 'enefit ta/ for the first @uarter ending :arch 1998& 3rovided$ ho8ever$
that the 8ithholding ta/ return for the first @uarter shall 'e filed and the ta/ is paid
not later than #uly ?$ 1998.
!e". #.$8.%&A'&#'( Rev. Regs. No. 0#-98 &%$ A)*il %998'
S.C+I2N .58.1. ,ithholding of Income +a/ on Compensation Income. G
"(% Compensation Income 9efined. G In general$ the term *compensation*
means all remuneration for services performed 'y an employee for his employer
under an employer!employee relationship$ unless specifically e/cluded 'y the
Code.
+he name 'y 8hich the remuneration for services is designated is immaterial.
+hus$ salaries$ 8ages$ emoluments and honoraria$ allo8ances$ commissions "e.g.
transportation$ representation$ entertainment and the liAe%; fees including
directorOs fees$ if the director is$ at the same time$ an employee of the
employer=corporation; ta/a'le 'onuses and fringe 'enefits e/cept those 8hich are
su'-ect to the fringe 'enefits ta/ under Sec. 33 of the Code; ta/a'le pensions and
retirement pay; and other income of a similar nature constitute compensation
income.
+he 'asis upon 8hich the remuneration is paid is immaterial in determining
8hether the remuneration constitutes compensation. +hus$ it may 'e paid on the
'asis of piece!8orA$ or a percentage of profits; and may 'e paid hourly$ daily$
8eeAly$ monthly or annually. cdrep
Remuneration for services constitutes compensation even if the relationship of
employer and employee does not e/ist any longer at the time 8hen payment is
made 'et8een the person in 8hose employ the services had 'een performed and
the individual 8ho performed them.
///
"% <iving @uarters or meals. G If a person receives a salary as
remuneration for services rendered$ and in addition thereto$ living @uarters or
meals are provided$ the value to such person of the @uarters and meals so
furnished shall 'e added to the remuneration paid for the purpose of determining
the amount of compensation su'-ect to 8ithholding. Bo8ever$ if living @uarters or
meals are furnished to an employee for the convenience of the employer$ the
value thereof need not 'e included as part of compensation income.
ANNOTATION: Revenue Au+it ,e-. O*+e* No. %-8$
Revenue (udit :emorandum 2rder No. 41!85
Cuidelines in the 1erification of 9eductions from +a/a'le Income
1985
* See Revenue :emorandum Circular No. 8!8 "dated 9ecem'er $
198% Re& +reatment of fi/ed or varia'le transportation$ representation and other
allo8ances$ and e/tension of time to furnish 7IR 0orm ,!; Revenue
:emorandum Circular No. 1!83 "dated #anuary )$ 1983% Re& :odification of
Revenue :emorandum Circular No. 8!8 regarding +reatment of 0i/ed or
1aria'le +ransportation$ representation and other allo8ances; Revenue
:emorandum Circular No. 16!83 "dated :ay 31$ 1983% Re& +reatment of 0i/ed or
1aria'le +ransportation$ Representation=.ntertainment and 2ther (llo8ances
under Sec. "c% of Revenue Regulations No. 6!8; Revenue :emorandum
Circular No. 1?!85 "dated (pril 1$ 1985% Re& +a/ treatment of su'sistence$ clothing
and @uarters allo8ances paid to the personnel of the (rmed 0orces of the
3hilippines "(03%; Revenue :emorandum Circular No. 64!91 "dated #uly 9$ 1991%
Re& +a/ +reatment of Representation and +ransportation (llo8ances "R(+(%
granted to pu'lic officer or employee under the Ceneral (ppropriations (ct;
Revenue :emorandum 2rder No. 36!8) "effective 2cto'er 6$ 198)% Re&
1erification of Cross Compensation Income of .mployees of 3rivate 0irms;
Revenue Regulations No. 4!81 "effective #anuary 1$ 198% Re& ,ithholding +a/
for Compensation Income >nder the Cross Income +a/ System; Revenue
Regulations No. 6!8 "effective 2cto'er 1$ 198% Re& Collection at Source of
Income +a/ on Compensation Income of .mployed Resident CitiDens and (liens$
Non!Resident CitiDens and Non!Resident (liens engaged in trade or 'usiness in
the 3hilippines$ and su'se@uent amendments made 'y Revenue Regulations No.
6!83 "effective (ugust 1$ 1983% Re& Revenue Regulations Implementing 39 1868
Cranting Special (dditional 3ersonal ./emption$ Revenue Regulations No. 9!83
"effective 2cto'er )$ 1983% Re& Supplemental Regulations to Revenue
Regulations No. 6!8$ Revenue Regulations No. !8? "effective #anuary 1$ 198?%
Re& Revised ,ithholding +a/ +a'les$ Revenue Regulations No. 1!86 "effective
#anuary 1$ 1986% Re& (mending pertinent provisions of the Revenue Regulations
6!8$ as amended$ other8ise Ano8n as the ,ithholding +a/ Regulations on
Compensation$ Revenue Regulations No. 1!9 "effective #anuary 1$ 199% Re&
(mending 3ertinent 3rovisions of Revenue Regulations No. 6!8$ (s (mended 'y
Revenue Regulations No. 1!86$ 2ther8ise Fno8n as the ,ithholding +a/
Regulations 2n Compensation and prescri'ing a Revised ,ithholding +a/ +a'le
therefor$ Revenue Regulations No. 3!9 "dated #uly 9$ 199% Re& (mending
pertinent provisions of Revenue Regulations No. 6!8$ as last amended$ 'y
Revenue Regulations No. 1!9 on the applica'ility=effectivity of the increased
'asic personal and additional e/emptions$ allo8a'le to individual ta/payers for
income ta/ purposes under Section 9 "1% of the National Internal Revenue Code$
as amended 'y Repu'lic (ct No. 5165$ and prescri'ing the guidelines for the
credit=refund of e/cess 8ithholding ta/ on compensation income for 1991$ and
Revenue Regulations No. )!93 "dated Novem'er 5$ 199% Re& Implementing
Repu'lic (ct No. 5)95$ *(n (ct (mending 3ertinent 3rovisions of the National
Internal Revenue Code$ as amended$ relative to the 0inal ,ithholding +a/ on
3urely Compensation Income*. (CC.SSla811
See no8 Revenue Regulations No. !98 "dated (pril 15$ 1998%
Re& Implementing Repu'lic (ct No. 8))$ *(n (ct (mending +he National Internal
Revenue Code$ as (mended* Relative to the ,ithholding on Income Su'-ect to
the ./panded ,ithholding +a/ and 0inal ,ithholding +a/$ ,ithholding of Income
+a/ on Compensation$ ,ithholding of Credita'le 1alue!(dded +a/ and 2ther
3ercentage +a/es$ and su'se@uent amendments made 'y Revenue Regulations
No. 3!98 "effective #anuary 1$ 1998% Re& Implementing Section 33 of the National
Internal Revenue Code$ as (mended 'y Repu'lic (ct No. 8)) Relative to the
Special +reatment of 0ringe 7enefits$ Revenue Regulations No. 1!98 "dated
(ugust 1)$ 1998% Re& (mending Section .?5. of Revenue Regulations No. !98$
Revenue Regulations No. 3!99 "dated #anuary $ 1999% Re& 0urther (mending
Section of Revenue Regulations No. 1!98$ Revenue Regulations No. 5!444
"dated #une 16$ 444% Re& (mending Revenue Regulations No. !98$ Revenue
Regulations No. 8!444 "dated (ugust 1$ 444% Re& (mending Sections
.58.1"(%"1%$ "(%"3%$ "(%"6%$ "(%"5%$ and "7%"11%"'% of Revenue Regulations No. !
98$ as (mended$ and Section .33"C% of Revenue Regulations No. 3!98$ 8ith
Respect to *9e :inimis* 7enefits$ (dditional Compensation (llo8ance "(C(%$
Representation and +ransportation (llo8ance "R(+(% and 3ersonal .conomic
Relief (llo8ance "3.R(%$ Revenue Regulations No. 14!444 "dated 9ecem'er
1)$ 444% Re& 0urther (mendments to Revenue Regulations No. !98 and 3!98$
as <ast (mended 'y Revenue Regulations No. 8!444$ and Revenue Regulations
No. 6!441 "dated #uly 31$ 441% Re& (mending 3ertinent 3rovisions of Revenue
Regulations Nos. 1!98$ !98$ as (mended$ and 5!9?$ as (mended$ and Revenue
:emorandum Circular No. 1!98 Relative to the Inclusion of (dditional +a/payers
to 'e Su'-ect to 0inal ,ithholding +a/$ Revision of the ,ithholding +a/ Rates on
Certain Income 3ayments Su'-ect to Credita'le ,ithholding +a/$ +ime for the
0iling of 1arious +a/ Returns and 3ayment of the +a/es 9ue +hereon (nd 2thers.
See also Revenue (udit :emorandum 2rder No. ?!86 "effective
:ay 1$ 1986% Re& Cuidelines in the 1erification of ,ithholding +a/es; Revenue
(udit :emorandum 2rder No. 1!444 "dated :arch 15$ 444% Re& >pdated
Band'ooA on (udit 3rocedures and +echni@ues 1olume I "Revision !Eear 444%;
and Repu'lic (ct No. 8))$ as amended$ entitled *(n (ct (mending +he National
Internal Revenue Code$ (s (mended* "effective #anuary 1$ 1998%$ specifically
Sections ?$ 6$ )"(%"1%$ ?"(%"1%$ 31$ 3"(% and 59 of the NIRC of 1995.
FULL TEXT: REV AU.IT ,E,. OR.ER 0%-8$
(pril 3$ 1985
R.1.N>. (>9I+ :.:2R(N9>: 2R9.R N2. 41!85
S>7#.C+ & Cuidelines in the 1erification of Bousing$ +ravel
Representation .ntertainment and (dvertising ./penses$ and 2ther 9eductions
from +a/a'le Income.
+2 & (ll Internal Revenue 2fficers and 2thers Concerned
1. 7acAground
+here are claimed 'usiness e/penses the verification of 8hich has given cause
for misunderstanding 'et8een the e/aminer and the ta/payer. +o minimiDe areas
of conflict 'et8een the 7ureau and the ta/paying pu'lic$ the follo8ing guidelines
are issued for the o'servance of all concerned effective 8ith the e/amination of
ta/ returns for the year 1986 ! provided that any affected ta/payer 8ho 8ould
8ant to amend his returns to conform 8ith these said guidelines may file an
amended return 8ithout penalty on or 'efore Septem'er 34$ 1985. casia
+hese guidelines shall 'e used in connection 8ith the interpretation of Sec. 34 of
the NIRC and in particular the 8ords *ordinary and necessary e/penses*$
reasona'le allo8ance for salaries and other compensation* and all other
e/penses that have heretofore 'een the su'-ect of improper interpretation of the
part of the ta/payer and=or the e/aminer. >nless other8ise provided$
su'stantiation$ i.e. "a% receipts or ade@uate records "'% amount of e/pense "c%
date and place of e/pense "d% purpose of e/pense "e% professional or 'usiness
relationship of e/pense$ must support each claimed 'usiness or professional
e/pense other8ise it shall 'e disallo8ed.
. Bousing and :eals
.1 If an employee receives a remuneration for services salaries and=or
allo8ances and in addition thereto living @uarters and=or meals$ the value to such
person of the @uarters and meals so furnished shall 'e added to the remuneration
other8ise paid for the purpose of determining the amount of compensation
su'-ect to 8ithholding ta/.
. +he value of lodging furnished to an employee 'y or on 'ehalf of the
employer shall 'e e/cluded from the employeeOs gross income$ if the lodging is
furnished in the 'usiness premises of the employer; and the employee is re@uired
to accept such lodging as a condition of his employment.
.3 +he value of meals furnished to an employee 'y or on 'ehalf of his
employer shall 'e e/cluded from the employeeOs gross income if the meals are
furnished on the 'usiness premises of the employer and the meals are furnished
for the convenience of the employer. :eals furnished 8ithout charge to an
employee as regarded as furnished for the convenience of the employer 8here
they are furnished to the employee during his 8orA day to have the employee
availa'le for 8orA during his meal period.
.) 7usiness premises of the employer means the place 8here the
employee performs a significant portion of his duties or 8here the employer
conducts a significant portion of his 'usiness. In case of dou't$ the criteria to 'e
used shall 'e "a% time$ more than ?4H of the employeeOs 8orA time or "'% value of
'usiness$ more than ?4H of the production of the said employee.
.? Not8ithstanding the provisions of the preceding paragraphs$ if an
employee is provided 'y his employer 8ith company housing or living @uarters
outside the 'usiness premises$ and such employee$ 'ecause of his position in the
employer!company$ also uses said house or living @uarters for the 'enefit of the
latter$ liAe entertaining and putting up houseguests and guest of the employer!
company$ then fifty percent "?4H% of such allo8ance$ rental value$ or depreciation
if the living @uarters are o8ned 'y the employer$ shall 'e added to the
compensation paid to such employee and 'e su'-ect to the 8ithholding ta/ on
8ages. +he employer may deduct the said housing e/pense as a 'usiness
e/pense.
.6 3rivileges such as *courtesy discounts* on purchases of company
merchandise of a value not to e/ceed 1= 'asic monthOs salary of an employee or
an officer shall not 'e added to the remuneration of the employee. cdt
.5 .ntertainment of and gifts to company officers and employees shall not
'e a deducti'le e/pense e/cept for Christmas and ma-or anniversary cele'rations
"e.g. ?th year of companyOs esta'lishment%$ sports tournament$ company picnics
not to e/ceed one a year provided that the value of the gift 8hen it is not a service
a8ard for length of service shall not e/ceed in value of 1= monthOs of the 'asic
salary of the employee receiving the gift.
3. +ransportation$ Representation and 2ther (llo8ances
3.1 +ransportation$ representation and other allo8ances$ 8hich are received
'y an employee in addition to the regular compensation fi/ed for his position or
office is compensation su'-ect to 8ithholding ta/.
3. Bo8ever$ reim'ursement for transportation$ representation or
entertainment e/penses shall not constitute ta/a'le compensation if&
a% it is for necessary traveling and representation or entertainment
e/penses paid or incurred 'y the employee in the pursuit of the trade or 'usiness
of the employer$ and
'% the employee is re@uired to$ and does$ maAe an accounting=li@uidation
for such e/pense in accordance 8ith the specific re@uirements of su'stantiation
for each category or e/pense.
(dvances in e/cess of actual e/penses$ if not returned to the employer
constitutes ta/a'le compensation.
3.3 0oreign +ravelling ./penses.
3.3.1 +he cost of foreign travel a8ay from the 3hilippines in pursuit of the trade
or 'usiness of the employer shall not constitute ta/a'le compensation to the
employee to the e/tent that it does not e/ceed the cost of a 'usiness class plane
ticAet for such travel or its e@uivalent. +he e/cess over the cost of a 'usiness
plane ticAet or its e@uivalent$ 8hether paid directly 'y the employer to the airline
company or reim'ursed to the employee$ shall not 'e deducti'le 'y the employer
from its ta/a'le income.
3.3. (llo8ances 8hich are pre!computed 'y the employer on a daily 'asis or
reim'ursement for cost of meals and lodging en route to oneOs foreign destination
in pursuit of employerOs trade or 'usiness and during the duration of the stay
thereat to the e/tent that they do not e/ceed one hundred fifty >nited States
dollars ">SP1?4.44% per day for trips to the >nited States$ (ustralia$ Canada$
.urope$ :iddle .ast and #apan$ and one hundred >nited States dollars
">SP144.44% for other places$ shall not 'e considered ta/a'le compensation to
the employee. (ny e/cess shall not 'e deducti'le to the employer even if
su'stantiated.
3.3.3 Reim'ursements for travel ta/es$ airport fees and other charges$ if duly
receipted or su'stantiated$ shall not constitute ta/a'le compensation and may 'e
deducti'le 'y the employer as a 'usiness e/pense.
3.3.) +he foregoing rules shall apply to similar e/penses incurred 8ithin a one!
day period 'efore arrival at the foreign destination and after departure therefrom.
3.3.? Su'-ect to the preceding rules$ e/penses incurred in attending t8o "%
foreign professional conventions a year shall constitute a deducti'le e/pense and
shall not constitute ta/a'le compensation.
3.3.6 Su'-ect to the foregoing e/penses limits and rules of su'stantiation the
home leave of an e/patriate employee shall 'e considered a deducti'le e/pense
of the employer and shall not form part of compensation income. If the family
e/penses of the employee is paid for 'y the employer the employer may opt not to
deduct the same as a 'usiness e/pense or to deduct the same as such as
e/pense in 8hich case the same shall constitute ta/a'le compensation of the
employee.
3.3.5 +he cost of maintaining and operating company vehicles needed in the
pursuit of the companyOs 'usiness such as delivery or tanA trucAs$ sales
representation unit$ maintenance other motor vehicles and the liAe shall 'e a ta/
deducti'le e/pense 'ut only one vehicle can 'e assigned to the use of any
company officer or employee$ to @ualify as such an e/pense and shall not
constitute ta/a'le income for the employee or officer. cda
3.) Representation and .ntertainment ./penses
3.).1 Reim'ursements for e/penses relating to entertainment shall 'e
e/cluded from compensation income and shall 'e deducti'le 'y the employer$ if "i%
used primarily for the furtherance of employerOs trade or 'usiness "ii% only to the
e/tent allo8a'le$ the same is directly related to the active conduct of the
employerOs trade or 'usiness and "iii% su'-ect to the rule of su'stantiation.
3.). 9ues paid to any one social$ athletic$ or sporting clu' or organiDation per
officer shall not 'e considered compensa'le income and may 'e deducti'le as a
'usiness e/pense. +his does not include$ ho8ever$ purchase of proprietary
shares and playing rights nor does it include e/penses in the said clu' or
organiDation unless said e/pense complies 8ith the rules on su'stantiation. +hese
rules do not cover dues on company mem'erships 8hich constitute deducti'le
e/pense.
3.).3 9ues or fees paid to professional or 'usiness organiDations and civic
clu' such as <ions$ Rotary$ Fi8anis shall not 'e ta/a'le to the employee and shall
'e ta/a'le deducti'le to the employer to the e/tent of one clu'.
3.).) >nless fully su'stantiated as incurred e/clusively in the pursuit of trade
or 'usiness$ reim'ursements for grocery$ marAet$ drugstore$ department store and
similar e/pense shall 'e considered ta/a'le income su'-ect to 8ithholding and
shall not 'e deducti'le to the employer.
). (dvertising and 3romotional ./penses
(s a general rule$ the company or 'usiness concerned shall decide the Aind and
siDe of advertising and=or promotional e/pense that has to 'e e/pended to
promote its product or image su'-ect to the follo8ing special re@uirements if the
ta/payer intends to deduct said e/pense as a ta/ deducti'le e/pense&
a% +he rules on su'stantiation must 'e follo8ed.
'% (ll payments for the purchase of promotional givea8ays$ contest priDes$
or similar material must 'e properly receipted.
c% (ll payments for services such as radio and +1 time$ print ads$ talent
fees$ advertising e/pertise or Ano8ho8 must 'e su'-ect to 8ithholding ta/.
2ther8ise$ the same cannot 'e claimed as a deducti'le e/penses.
ANNOTATION: Revenue Regulations No. 0/-08 &%$ A)*il #008'
Revenue Regulations No. 44?!48
0urther (mendments to Rev. Reg. Nos. !98 and 3!98 Re& *9e :inimis 7enefits*
448
* (mends Revenue Regulations No. !98 "effective #anuary 1$ 1998% Re&
Implementing Repu'lic (ct No. 8))$ *(n (ct (mending +he National Internal
Revenue Code$ as (mended* Relative to the ,ithholding on Income Su'-ect to
the ./panded ,ithholding +a/ and 0inal ,ithholding +a/$ ,ithholding of Income
+a/ on Compensation$ ,ithholding of Credita'le 1alue!(dded +a/ and 2ther
3ercentage +a/es$ and su'se@uent amendments made 'y Revenue Regulations
No. 3!98 "effective #anuary 1$ 1998% Re& Implementing Section 33 of the National
Internal Revenue Code$ as (mended 'y Repu'lic (ct No. 8)) Relative to the
Special +reatment of 0ringe 7enefits$ and Revenue Regulations No. 8!444
"dated (ugust 1$ 444% Re& (mending Sections .58.1"(%"1%$ "(%"3%$ "(%"6%$ "(%
"5%$ and "7%"11%"'% of Revenue Regulations No. !98$ as (mended$ and Section
.33"C% of Revenue Regulations No. 3!98$ 8ith Respect to *9e :inimis* 7enefits$
(dditional Compensation (llo8ance "(C(%$ Representation and +ransportation
(llo8ance "R(+(% and 3ersonal .conomic Relief (llo8ance "3.R(%$ and
Revenue Regulations No. 14!444 "dated 9ecem'er 1)$ 448% Re& 0urther
(mendments to Revenue Regulations No. !98 and 3!98$ as <ast (mended 'y
Revenue Regulations No. 8!444.
RR !98 is further amended 'y Revenue Regulations No. ?!
411 "issued :arch 16$ 411% Re& 0urther (mendments to Revenue Regulations
Nos. !98 and 3!98$ as <ast (mended 'y Revenue Regulations No. ?!448$ 8ith
Respect to *9e :inimis 7enefits*. acesS<8?
See Revenue Regulations No. 14!448 "dated #uly 8$ 448% Re&
Implementing 3ertinent 3rovisions of Repu'lic (ct No. 9?4)$ *(n (ct (mending
Sections $ )$ 3)$ 3?$ ?1$ and 59 of Repu'lic (ct No. 8))$ as (mended$
2ther8ise Fno8n as +he National Internal Revenue Code* Relative to the
,ithholding of Income +a/ on Compensation and 2ther Concerns; and Revenue
:emorandum 2rder No. )!448 "dated :ay 9$ 448% Re& 3olicies and
Cuidelines for R(+. Cases.
See also Repu'lic (ct No. 8))$ as amended$ entitled *(n (ct
(mending +he National Internal Revenue Code$ (s (mended* "effective #anuary
1$ 1998%$ specifically$ Sections )"(%$ 33$ ?5"(%$ ?8"(%$ 58$ 59$ 84$ 81$ 8 and 83$
of the NIRC of 1995.
FULL TEXT: REV RE 0/-08
(pril 15$ 448
R.1.N>. R.C><(+I2NS N2. 44?!48
S>7#.C+ & 0urther (mendments to Revenue Regulations Nos. !
98 and 3!98$ as <ast (mended 'y Revenue Regulations No. 14!444$ 8ith
Respect to *9e :inimis 7enefits*
+2 & (ll Internal Revenue 2fficials and 2thers Concerned
3ursuant to Sections ) and )) in relation to Section 33 of the +a/ Code of
1995$ these Regulations are here'y promulgated to further amend Revenue
Regulations "RR% Nos. !98 and 3!98$ as last amended 'y RR No. 14!444$
8ith respect to *9e :inimis* 'enefits 8hich are e/empt from income ta/ on
compensation as 8ell as from fringe 'enefit ta/.
S.C+I2N 1. Section .58.1 "(% "3% "c% and "d% of RR !98$ as last amended
'y RR 14!444$ is here'y further amended to read as follo8s&
*Sec. .58.1 ,ithholding of Income +a/ on Compensation Income. G
"(% . . .
"1% . . .
/// /// ///
"3% 0acilities and privileges of relatively small value. G . . .
/// /// ///
+he follo8ing shall 'e considered as *de minimis* 'enefits not su'-ect to income
ta/ as 8ell as 8ithholding ta/ on compensation income of 'oth managerial and
ranA and file employees&
"a% . . .
/// /// ///
"c% Rice su'sidy of 31$?44.44 or one "1% sacA of ?4 Ag. rice per month
amounting to not more than 31$?44.44;
"d% >niform and Clothing allo8ance not e/ceeding 3)$444.44 per annum;
/// /// ///
S.C+I2N . Section .33 "C% of RR 3!98$ as last amended 'y RR 14!444$
is here'y further amended to read as follo8s&
*Sec. .33. Special +reatment of 0ringe 7enefits. G
"(% Imposition of 0ringe 7enefits +a/ G . . .
/// /// ///
"7% 9efinition of 0ringe 7enefit G . . .
/// /// ///
"C% 0ringe 7enefits Not Su'-ect to 0ringe 7enefit +a/ G In general$ the fringe
'enefit ta/ shall not 'e imposed on the follo8ing fringe 'enefits&
/// /// ///
+he term *9. :INI:IS* 'enefits 8hich are e/empt from the fringe 'enefit ta/
shall$ in general$ 'e limited to facilities or privileges furnished or offered 'y an
employer to his employees that are of relatively small value and are offered or
furnished 'y the employer merely as a means of promoting the health$ good8ill$
contentment$ or efficiency of his employees such as the follo8ing&
"a% . . .
/// /// ///
"c% Rice su'sidy of 31$?44.44 or one "1% sacA of ?4 Ag. rice per month
amounting to not more than 31$?44.44;
"d% >niform and Clothing allo8ance not e/ceeding 3)$444.44 per annum;
S9(+.c
/// /// ///*
S.C+I2N 3. +ransitory 3rovisions. G +he 'enefits herein provided shall
apply to income earned starting the year 448.
S.C+I2N ). Repealing Clause. G (ll e/isting rules and regulations or parts
thereof 8hich are inconsistent 8ith the provisions of these regulations are here'y
revoAed$ repealed or modified accordingly.
S.C+I2N ?. .ffectivity Clause. G +hese Regulations shall taAe effect after
fifteen "1?% days follo8ing its pu'lication in any ne8spaper of general circulation.
ANNOTATION: Revenue Regulations No. 0/-#0%% &%0 ,a*"1 #0%%'
Revenue Regulations No. 44?!11
0urther (mendments to RR Nos. !98 and 3!98$ as <ast (mended 'y RR No. ?!
448$ 8ith Respect to *9e :inimis 7enefits*
411
* (mends Revenue Regulations Nos. !98 "effective #anuary 1$ 1998% Re&
Implementing Repu'lic (ct No. 8))$ *(n (ct (mending +he National Internal
Revenue Code$ as (mended* Relative to the ,ithholding on Income Su'-ect to
the ./panded ,ithholding +a/ and 0inal ,ithholding +a/$ ,ithholding of Income
+a/ on Compensation$ ,ithholding of Credita'le 1alue!(dded +a/ and 2ther
3ercentage +a/es$ as su'se@uently amended 'y Revenue Regulations No. 3!98
"effective #anuary 1$ 1998% Re& Implementing Section 33 of the National Internal
Revenue Code$ as (mended 'y Repu'lic (ct No. 8)) Relative to the Special
+reatment of 0ringe 7enefits; Revenue Regulations No. 8!444 "dated (ugust 1$
444% Re& (mending Sections .58.1"(%"1%$ "(%"3%$ "(%"6%$ "(%"5%$ and "7%"11%"'% of
Revenue Regulations No. !98$ as (mended$ and Section .33"C% of Revenue
Regulations No. 3!98$ 8ith Respect to *9e :inimis* 7enefits$ (dditional
Compensation (llo8ance "(C(%$ Representation and +ransportation (llo8ance
"R(+(% and 3ersonal .conomic Relief (llo8ance "3.R(%; Revenue Regulations
No. 14!444 "dated 9ecem'er 1)$ 448% Re& 0urther (mendments to Revenue
Regulations No. !98 and 3!98$ as <ast (mended 'y Revenue Regulations No. 8!
444; and Revenue Regulations No. ?!448 "issued (pril 15$ 448% Re& 0urther
(mendments to Revenue Regulations Nos. !98 and 3!98$ as <ast (mended 'y
Revenue Regulations No. 14!444$ 8ith Respect to *9e :inimis 7enefits*.
aces<8
See Revenue Regulations No. 14!448 "dated #uly 8$ 448% Re&
Implementing 3ertinent 3rovisions of Repu'lic (ct No. 9?4)$ *(n (ct (mending
Sections $ )$ 3)$ 3?$ ?1$ and 59 of Repu'lic (ct No. 8))$ as (mended$
2ther8ise Fno8n as +he National Internal Revenue Code* Relative to the
,ithholding of Income +a/ on Compensation and 2ther Concerns; and Revenue
:emorandum Circular No. 4!411 "issued :ay 13$ 411% Re& Special +reatment
of 0ringe 7enefits under Section .33 of Revenue Regulations No. 3!98$ as last
amended 'y Revenue Regulations No. ?!411.
See also Repu'lic (ct No. 8))$ as amended$ entitled *(n (ct
(mending +he National Internal Revenue Code$ (s (mended* "effective #anuary
1$ 1998%$ specifically$ Section 33$ ?5"(%$ ?8"(%$ 58$ 59$ 84$ 81 and 83 of the NIRC
of 1995.
FULL TEXT: REV RE 0/-#0%%
:arch 16$ 411
R.1.N>. R.C><(+I2NS N2. 44?!11
S>7#.C+ & 0urther (mendments to Revenue Regulations Nos. !
98 and 3!98$ as <ast (mended 'y Revenue Regulations No. ?!448$ 8ith Respect
to *9e :inimis 7enefits*
+2 & (ll Internal Revenue 2fficials and 2thers Concerned
3ursuant to Sections ) and )) in relation to Section 33 of the +a/ Code of
1995$ these Regulations are here'y promulgated to further amend Revenue
Regulations "RR% No. !98$ as last amended 'y RR No. ?!448$ 8ith respect to
*9e :inimis* 'enefits 8hich are e/empt from income ta/ on compensation as 8ell
as from fringe 'enefit ta/.
S.C+I2N 1. Section .58.1 "(% "3% "c% and "d% of RR !98$ as last amended
'y RR ?!448$ is here'y further amended to read as follo8s&
*Sec. .58.1. ,ithholding of Income +a/ on Compensation Income. G
aC+(9I
"(% . . .
"1% . . .
/// /// ///
"3% 0acilities and privileges of relatively small value. G . . .
/// /// ///
+he follo8ing shall 'e considered as *de minimis* 'enefits not su'-ect to income
ta/ as 8ell as 8ithholding ta/ on compensation income of 'oth managerial and
ranA and file employees&
"a% :onetiDed unused vacation leave credits of private employees not
e/ceeding ten "14% days during the year;
"'% :onetiDed value of vacation and sicA leave credits paid to government
officials and employees;
"c% :edical cash allo8ance to dependents of employees$ not e/ceeding
35?4 per employee per semester or 31? per month; 9I(c+.
"d% Rice su'sidy of 31$?44 or one "1% sacA of ?4 Ag. rice per month
amounting to not more than 31$?44;
"e% >niform and Clothing allo8ance not e/ceeding 3)$444 per annum;
"f% (ctual medical assistance$ e.g.$ medical allo8ance to cover medical and
healthcare needs$ annual medical=e/ecutive checA!up$ maternity assistance$ and
routine consultations$ not e/ceeding 314$444.44 per annum;
"g% <aundry allo8ance not e/ceeding 3344 per month;
"h% .mployees achievement a8ards$ e.g.$ for length of service or safety
achievement$ 8hich must 'e in the form of a tangi'le personal property other than
cash or gift certificate$ 8ith an annual monetary value not e/ceeding 314$444
received 'y the employee under an esta'lished 8ritten plan 8hich does not
discriminate in favor of highly paid employees;
"i% Cifts given during Christmas and ma-or anniversary cele'rations not
e/ceeding 3?$444 per employee per annum; a9c.+C
"-% 9aily meal allo8ance for overtime 8orA and night=graveyard shift not
e/ceeding t8enty!five percent "?H% of the 'asic minimum 8age on a per region
'asis;
(ll other 'enefits given 'y employers 8hich are not included in the a'ove
enumeration shall not 'e considered as *de minimis* 'enefits$ and hence$ shall 'e
su'-ect to income ta/ as 8ell as 8ithholding ta/ on compensation income.
/// /// ///*
S.C+I2N . Section .33 "C% of RR 3!98$ as last amended 'y RR ?!448$ is
here'y further amended to read as follo8s&
*Sec. .33. Special +reatment of 0ringe 7enefits. G
"(% Imposition of 0ringe 7enefits +a/ G . . .
/// /// ///
"7% 9efinition of 0ringe 7enefit G . . .
/// /// ///
"C% 0ringe 7enefits Not Su'-ect to 0ringe 7enefit +a/ G In general$ the fringe
'enefit ta/ shall not 'e imposed on the follo8ing fringe 'enefits& 9c+a.B
/// /// ///
+he term *9. :INI:IS* 'enefits 8hich are e/empt from the fringe 'enefit ta/
shall$ in general$ 'e limited to facilities or privileges furnished or offered 'y an
employer to his employees that are of relatively small value and are offered or
furnished 'y the employer merely as a means of promoting the health$ good8ill$
contentment$ or efficiency of his employees. +he follo8ing are considered as *de
minimis* 'enefits granted to each employee&
"a% :onetiDed unused vacation leave credits of private employees not
e/ceeding ten "14% days during the year;
"'% :onetiDed value of vacation and sicA leave credits paid to government
officials and employees;
"c% :edical cash allo8ance to dependents of employees$ not e/ceeding
35?4 per employee per semester or 31? per month;
"d% Rice su'sidy of 31$?44 or one "1% sacA of ?4 Ag. rice per month
amounting to not more than 31$?44; c(a9B+
"e% >niform and Clothing allo8ance not e/ceeding 3)$444 per annum;
"f% (ctual medical assistance$ e.g.$ medical allo8ance to cover medical and
healthcare needs$ annual medical=e/ecutive checA!up$ maternity assistance$ and
routine consultations$ not e/ceeding 314$444.44 per annum;
"g% <aundry allo8ance not e/ceeding 3344 per month;
"h% .mployees achievement a8ards$ e.g.$ for length of service or safety
achievement$ 8hich must 'e in the form of a tangi'le personal property other than
cash or gift certificate$ 8ith an annual monetary value not e/ceeding 314$444
received 'y the employee under an esta'lished 8ritten plan 8hich does not
discriminate in favor of highly paid employees;
"i% Cifts given during Christmas and ma-or anniversary cele'rations not
e/ceeding 3?$444 per employee per annum;
"-% 9aily meal allo8ance for overtime 8orA and night=graveyard shift not
e/ceeding t8enty!five percent "?H% of the 'asic minimum 8age on a per region
'asis; +C(SIB
(ll other 'enefits given 'y employers 8hich are not included in the a'ove
enumeration shall not 'e considered as *de minimis* 'enefits$ and hence$ shall 'e
su'-ect to income ta/ as 8ell as 8ithholding ta/ on compensation income.
/// /// ///*
S.C+I2N 3. +ransitory 3rovisions. G +he 'enefits herein provided shall
apply to income earned starting the year 411.
S.C+I2N ). Repealing Clause. G (ll e/isting rules and regulations or parts
thereof 8hich are inconsistent 8ith the provisions of these regulations are here'y
revoAed$ repealed or modified accordingly.
S.C+I2N ?. .ffectivity Clause. ///
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9ecem'er 1?$ 449. Tcopied from pdf availa'le at 7ani@ued <a8 8e'siteU