TARLAC STATE UNIVERSITY - COLLEGE OF BUSINESS AND ACCOUNTANCY

2ND SEMESTER ACADEMIC YEAR 2021-2022

TAX 3 – SPECIAL TAXATION

MAGNA CARTA FOR PWDs
Person with Disability – refers to an individual
suffering from restriction or different abilities, as a
result of mental, physical or sensory impairment to
perform an activity in a manner or within the range
considered normal for human being (Section 2b, RR 1-
2009).
Whether minor or of legal age, and who is a Filipino
citizen, who may or may not be related to his/her
benefactor and who is living with and dependent upon
such benefactor for his/her chief support shall qualify
as a dependent (Section 2d, RR 1-2009).
Minimum Wage Earner PWD shall be exempt from the
payment of individual income tax and shall not be
required to file an income tax return if the returnable
income is in the nature of compensation income.
Grants of Discounts to PWDs
20% discount from all establishments supplying certain
goods and services for the exclusive use and enjoyment
or availment of the person with disability.
A PWD who is also a senior citizen can claim only one
discount.
In the purchase of goods and services which have
promotional discount, the person with disability can
avail of the promotional discount or the PWD discount
whichever is higher.
Establishments granting sales discounts to persons
with disability on their sale of qualified goods and/or
services under the law shall be entitled to deduct the
said sales discount from gross income for the same
taxable year that the discount is granted.
g. Theatre admission fees, concert halls, cruises,
carnivals, cinema houses and other similar
places;
h. Funeral and burial services for the death of
PWD.
Proof of Entitlement to Privileges
✓ Identification Card (ID) issued by the City or
municipal mayor or the barangay chairman of the
place where the person with disability resides; or
✓ Passport of the person with disability; or
✓ Transportation discount fare ID issued by the
National Council for the Welfare of Disabled
Persons (NCWDP)
Upon the effectivity of the IRR jointly promulgated by
the different government agencies, however, NCWDP
will already adopt the ID issued by the LGUs for
purposes of uniformity in the implementation.
Discounts granted to persons with disability by the
seller of qualified goods and services shall be treated
as an ordinary and necessary expenses deductible from
the gross income of the seller falling under the
category of itemized Deductions, and can only be
claimed if the seller does not opt to claim the OSD
during the taxable quarter/year.
Private establishments employing persons with
disability shall be entitled to additional deduction from
their gross income equivalent to twenty-five percent
(25%) of the total amount paid as salaries and wages to
PWDs and fifty Percent (50%) of direct cost of
improvements or modifications to improve facilities to
provide reasonable accommodation for PWDs.

Sale or lease of the goods and services to PWDs is now

VAT-exempt transaction under RA 10963 or the TRAIN
LAW:
a. Medicines;
b. Professional fees of attending physicians and
licensed health workers;
c. Medical and dental services, diagnostic and
laboratory fees;
d. Actual fare for land transport travel, air
transport services, and sea shipping vessels;
e. Utilization of services in hotels and similar
lodging places;
f. Restaurants and recreation centers;