Deductions

Sections 34-36, Tax Code (as amended by Republic Act 10963)

￮ Ordinary
￮ Necessary
￮ Paid or incurred during the taxable year
￮ Directly attributable to the development, management, operation, and/or conduct of the
business (Sec. 34, NIRC)

Business expenses

Republic Act 10028 (Sections 3 & 14 only)

Breastfeeding Promotion Act

Republic Act 8502 Republic Act 8525 (Sections 1 to 5 only)

Jewelry Industry Development Act

Republic Act 9999

Free Legal Assistance

Republic Act 7277 (Section 8 only)

Magna Carta for Disabled Persons

Commissioner of Internal Revenue vs. Isabela Cultural Corporation (February 12, 2007)
Accrual Method applied to legal and audit expenses

ING Bank, N.V. vs. Commissioner of Internal Revenue (July 22, 2015)
Accrual of Bonus granted to employees – when to accrue

Commissioner of Internal Revenue vs. General Foods (Phils.) Inc. (April 24, 2003)
Advertising Expense of General Foods

Commissioner of Internal Revenue vs. Lancaster Philippines, Inc. (July 12, 2017)
Crop Method of Accounting

Aguinaldo Industries Corporation vs. Commissioner of Internal Revenue (February 25,

1982)
Savings on sale of fish nets land distributed to officers.
 Atlas Consolidated Mining & Development Corporation vs. Commissioner of Internal
Revenue (January 27, 1981)
(Atlas Consolidate vs. CIR, deductibility of stockholders relation services)

Zamora vs. Collector of Internal Revenue (May 31, 1963)

(Zamora vs. CIR, Deductibility of promotion and representation expenses that
were not fully supported)

C.M. Hoskins & Co., Inc. vs. Commissioner of Internal Revenue (November 28, 1969)

Calanoc vs. Collector of Internal Revenue (November 29, 1961)

Kuenzle & Streiff, Inc. vs. Collector of Internal Revenue (October 20, 1959)

RR 10-2002 (July 10, 2002)

RR 1-2009 (December 9, 2008)

RR 7-2010 (July 20, 2010)

Interest (as amended by Republic Act 9337)

Paper Industries Corporation of the Philippines vs. Court of Appeals (December 1, 1995)
Commissioner of Internal Revenue vs. Vda. de Prieto (September 30, 1960) RR 13-2000
(November 20, 2000)

Interest arbitrage

BIR Ruling No. 006-00 (January 5, 2000)

Taxes

Commissioner of Internal Revenue vs. Lednicky (July 31, 1964)

BIR Ruling 123-13 (March 25, 2013)

Losses

Section 38, Tax Code

Tambunting Pawnshop vs. Commissioner of Internal Revenue (29 July 2013)

RR 12-77 (6 October 1977)

RMO 13-2009 (16 October 2009)

Forex Losses
 BIR Ruling 206-90 (30 October 1990)
BIR Ruling No. 144-85 (26 August 1985)

Bad Debts

Philex Mining Corporation vs. Commissioner of Internal Revenue (16 April 2008)
Philippine Refining Company vs. Court of Appeals (8 May 1996)
Fernandez Hermanos, Inc. vs. Commissioner of Internal Revenue (30 September 1969)

RR 5-99 (10 March 1999)

Depreciation

Basilan Estates, Inc. vs. Commissioner of Internal Revenue (5 September 1967)

Limpan Investment Corporation vs. Commissioner of Internal Revenue (26 July 1966)

RR 12-2012

Depletion

Consolidated Mines, Inc. vs. Court of Tax Appeals

Charitable and other contributions

Republic Act 9500 (Section 25 only)

Republic Act 9521, Section 3

BIR Ruling 19-01, (10 May 2001)

Research and Development

3M Philippines, Inc. vs. Commissioner of Internal Revenue (26 September 1988)

Additional Requirements for deductibility

RMO 38-83 (14 November 1983)

RR 12-2013 (12 July 2013)
Optional Standard Deduction

Section 34(L), Tax Code as amended by Republic Act Nos. 9504 and 10963

RR 14-01 (27 August 2001)

BIR Ruling 30-00 (10 August 2000)

Premium payments on health and/or hospitalization insurance

Non-deductible expenses

Section 36, Tax Code

Esso Standard Eastern, Inc. vs. Commissioner of Internal Revenue (7 July 1989(

Section 119-122, RR 2