y br ell personal Equity Retirement Account (PERA) under RA 9505, otherwise known as the “Personal Equity Retirement t (PERA) Act of 2008", all income earned from the investment and pot tof PERA assets in PERA investment products shall be exempt from nermaxes provided the said PERA investment products have been duly jted by the concerned regulatory agency**. Moreover, income from 3 stments and reinvestments of PERA assets in government securities is likewise i not from income taxes. Under the law, individuals are allowed to set up their 2 RA which shall enjoy certain tax incentives. Employees, including sel employed individuals and Overseas Filipinos, can start planning their future by establishing their own PERA. REGULATORY AGENCIES Bangko Sentral ng Pilipinas (BSP) ~'as regards banks, trust entities, and other BSP supervised financial institutions. Securities and Exchange Commission (SEC) - for investment companies, investment houses, stock brokerages. Office of the Insurance Commission (OIC) - for insurance companies and pre-need companies. DEFINITION OF TERMS (RR 17-2011 PERA — shall refer to a Contributor's voluntary retirement account established from the qualified PERA Contributions and/or Qualified Employer Contributions, for the purpose of being invested solely in Qualified/Eligible PERA Investment Products, Qualified Employer's Contribution - shall refer to the contribution made by the employer (whether as a single proprietor, a partnership or a corporation) from the private sector to the PERA established by his/its employee which, together with such employee's contribution, if any, shall not exceed such employee's Qualified PERA Contribution. Qualified PERA Contributions - shall refer to the contributions of the Contributor to his PERA, which Shall not exceed P100,000 per calendar year (if the Contributor is non-overseas Filipino), or 200,000 per calendar year (if the Contributor is an Overseas Filipino or in representation of an Overseas Filipino), Administrator - shall refer to an entity which had been pre-qualified by the concerned Regulatory ‘Agency ae accredited by the BIR, responsible for administering and overseeing the PERA of the 575PERA 4 TAX TREATMENT OF PERA “ lincome. PERA Disinbuton. Employers conmbutons) PERA income lwestment income of the Contributor consisting of al income ean, the mvestments and resnvesiments of his PERA Assets in the manmnay 0 alowed heren shal be exemot from the following 'ax8s 3s may be oe 6 1. The final witnhokding tax on interest from any currency bank depos: any other monetary benelt fom deposit SuDSBIuteS and fom tere, MOC oe Senilar arangements, ncudng depostory Dank under the expangey 32 22 currency deposit sysiem fore, 2 The tax on captal gains from sale. exchange. retirement or matunty of » debentures. or other cersficate of indebtedness. °Y Of Bonds, 3. The 10% tax on cash andior property dividends, actualyconsiny received fom a comesic Corporation, including a mutsal fund Company! 4 The capital gains tax onsale, barter or exchange oF other disposition oe Of stock in a domestic corporation. 5. Regular income tax Provided, that each specific investment products must be approved by ne concemed regulatory agency before its income or distribution can be grantes tax incentives and privieges. Provided, further, that non-income taxes # applicable, relating to the above investment income of the PERA account of Contributor, shall remain imposable, including Percentage Taxes (Sectors 116-127 of the Tax Code), value added tax and documentary stamp tax PERA Distributions Qualified PERA distributions received by the Contributor, or in case of the death of the Contributor, by his heirs or beneficiaries, whether in a lump-sum or pension for a definite period or ifetime pension, shall be excluded from the gross income of the Contributor and shall not be subject to income tax. The same shall bbe excluded from the gross income in the hands of his heirs or beneficiaries, asthe case may be, and shall not be subject to estate tax. Qualified Employer's Contribution to the Employee's PERA The qualified employer's contribution to his/its employee's PERA shall be in addition {0, and not in lieu of, the employer's contribution to SSS and its obligation 10 pay retirement benefit to his/ts employees under the Labor Code. The total of the ‘employer's and employee's contribution to his PERA and all the benefits, including tax incentives and privileges arising therefrom, shall all belong to the employee an? shall not, in anyway, inure to the benefit of the employer. The employer shall not be entitled to any 5% credit from its contribution to an employee's PERA. 576 PERA Account ‘The qualified employer's contnbution to hesits employee's PERA shal not part of employee's taxable gross income hence exempted trom ne rosea 12x on come whether withholding tax on compensation or fringe ‘On the other hand. the employer can ciaim the actual amount of hs *S ies empires coreavon ae 2 Geducon te se grons incarve. bea andy ae exent of the employers conroution Tat woud compete the maxmum 1 paable PERA conuiouton of an employee ax credit ‘A quatiies contributor shal be enttied toa tax creat in me amou ‘Quaified PERA Contnoutons mage m one Se Scary oar Bipe ConEIDUIOT iS an Overseas Filipino a errata toons ee neat oe ee rn See wae seeae Ses og tonne toes eons create aera (GUIDELINES The BIR’s PERA Processing Office (i.e. the Audit informatx Exemption and Incentives Division (AITEID) under the Assessment Service ‘cept only Appications for Accreditation (BIR Form No. 1841) (Annex A’ 'e0Dy PERA Administrator based on “Qualification Certificate” ssuec Dy te ‘concemed Regulatory Authorty/Agency (i.e., Bangko Sentral ng Pilipinas (BSP) or the Securities and Exchange Commission (SEC) or the insurance Commission (IC Upon approval of the Application for Accreditation, the AITEID shall issue Cerificate of Accreditation (BIR Form No. 2336) (Annex “A-1") to the PERA ‘Administrator, 2 copy of which shall be transmitted to the concemed Revenue District Offices (RDOs)Offices under the Large Taxpayers Service (LTS) having jurisdiction over the PERA Administrator, for proper monitoring and to ensure that the PERA Administrator maintains a separate set of books of accounts to record all PERA contributions and related transactions (eg, income earned by the PERA Assets, withdrawals, andlor terminations thereof); ___ The accreditation of a PERA Administrator shall be valid from the date of ‘ssuance of the Certificate of Accreditation until it is suspended or revoked for violation of any of the provisions of Republic Act (RA) 9505, or for any of the {rounds stated under Section 17 thereof, as enumerated under Rule 4.0 of the Rules and Regulations Implementing the PERA Act of 2008; 577, PERA . Accoun ie The PERA Administrator shall be designated by the Contributor to hang, administration of PERA established by the employee which, together with (re contribution made by the employer, if any, shall not exceed the employee's quajt"® PERA contribution. The PERA Administrator shall ensure that contributions @d employees and/or employer, self-employed, Overseas Filipinos, one representation of such Overseas Filipinos) are under its exclusive adminig through an on-line validation with the PERA Contributor's database established by the BSP as provided under Rule 4.4.4 of the Rules and Reguia Implementing the PERA Act of 2008; in tration to e tions Contributions to PERA can come from employees and/or their employers self- employed individuals which shall not exceed Php100,000.00 per calengs” year, or Php200,000.00 per calendar year if the contributor is an Overseas Filiping as defined in Rule 7 of the Rules and Regulations Implementing the PERA Act ot 2008; A Contributor may create and maintain a maximum of five (5) PERAs at an, one time. However, each PERA shall be confined to only one category of PERY Investment Product. Thus, a Contributor can have five (5) PERAs and five (5) categories of PERA Investment Products; An employee or self-employed qualified Contributor shall be entitled to a five percent (5%) tax credit of the aggregate qualified PERA contributions made in a calendar year which shall be allowed to be credited only against their income tax liabilities. An Overseas Filipino Contributor with taxable income in the Philippines shall be entitled to a five percent (5%) tax credit to be claimed against any internal revenue tax liabilities, excluding his/her withholding tax liabilities as a withholding agent. However, Overseas Filipino Contributor without taxable income in the Philippines shall also be entitled to a five percent (5%) tax credit but will eventually be forfeited in favor of the government. 578