BIR Ruling No. 480-2021

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Quezon City

Sec. 32 (B)(6)(a), Tax Code BIR Ruling No. 1336-18 CT-a-20 DEC 2

Ortigas Center, Pasig City EUROTILES INDUSTRIAL CORPORATION Unit 201 Prestige Tower, F. Ortigas Jr. Road

Attention: Ms. Gingin R. Plandez HR Assistant

Gentlemen:

retiring employee, MR. DICKSON M. ZURBANO ("Mr. Zurbano") are exempt from withholding tax. This refers to your request for a ruling that the retirement benefits to be received by your

duly organized and existing under the laws of the Philippines. Eurotiles does not maintain a company policy or qualified retirement benefit plan duly approved by the Bureau of Internal Revenue. Mr. Zurbano, with Taxpayer Identification No. Eurotiles for the period June 6, 1994 to January 2. 2020. He was sixty-one (61) years old at the time of his retirement. As represented, Eurotiles Industrial Corporation ("Eurotiles"), is a domestic corporation was an employee of

Code of 1997 (Tax Code), as amended. states: In reply, please be informed that Section 32 (B) (6) (a) of the National Internal Revenue

"Section 32. Gross Income.

x X x X X x x X x

included in gross income and shall be exempt from taxation under this Title: (B) Exclusions from Gross Income. -- The following items shall not he

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Eurotiles Industriai Corporation (Mr. Dickson M. Zurbano) Page 2 of 3

x x x x X X X X x

(6)Retirement Benefits, Pensions, Gratuities, etc.

received by officials and employees of private firms, whether individual or corporate, in accordance with a reasonable private benefit plan maintained by the of the same employer for at least ten (10) years and is not less than fifty (50) years employer: Provided, That the retiring official or emplovee has been in the service of age at the time of his retirement: . . (a) Retirement benefits received under Republic Act No. 7641 and those

prescribes that: Section 1 of Republic Act (RA) No. 7641, amending the Labor Code of the Philippines,

otherwise known as the Labor Code of the Philippines, is hereby amended to read as follows: "Section 1. Article 287 of Presidential Decree No. 442, as amended.

reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. Art. 287. Retirement. -- Any employee may be retired upon

Provided, however, that an employee's retirement under any collective bargaining and other agreements shall not be less than such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: those provided herein. In case of retirement, the employee shall be entitled to receive

for retirement benefits of. emplovees in the establishment. an age, who has served at least five (5) years in the establishment, may one-half (1/2) month salary for every year of service, a fraction of at employee upon reaching the age of sixty (60) years or more, but not bevond sixty-five (65) which is declared the compulsory retirement retire and shall be entitled to retirement pay eguivalent to at leas least six (6) months being considered as one (1) whole _vear.' (Underscoring supplied.) In the absence of a retirement plan or agreement providing

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Eurotiles {ndustrial Corporation (Mr. Dickson M. Zurbano) Page 3 of 3

of RA No. 7641 are met, viz: shall be exempt from income tax, provided the two (2) conditions set forth under Section 1 In view of the foregoing provisions, retirement benefits received by an employee

l) the employee had been in the service of the same private firm for at least five (5) years; and

2) he is at least sixty (60) years old at the time of retirement.

approved by the Bureau of Internal Revenue, the provisions of RA No. 7641 shall apply. Since Mr. Zurbano was sixty-one (61) years old at the time of his retirement; and has served Eurotiles for at least twenty-six (26) years, his retirement benefits shall be exempt from income tax, and consequently, from withholding tax, pursuant to Section 32 (B) (6) (a) of the Tax Code, as amended. Considering that Eurotiles does not maintain a "reasonable private benefit plan" duly

upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered null and void. This ruling is being issued on the basis of the foregoing facts as represented. However, if

Very truly yours.

Commissioner ofintern CAESAR R. DULAY 1 nal Reyenue

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