BIR Ruling No. 002-2017

REPUBLIC OF THE PHILIPPINES DEPART'MENT OF FINANCE BUREAU OF INTERNAL REVENUE

CP Quezon City

: Section 32 (B)(6)(b} Fco2 0 Person to Contact: Chief. Law Division Tel. Nos. 926-55-36/ 927-09-63

of the Tax 1-12-2017

amended Code, as

ROSE PHARMACY 16 E. Osmena cor. L. Bacayo St. Guadalupe. Cebu City

Attention: ADOR MORADOS

Employee Relations Manager

Gentlemen:

withholding tax on separation pay of Ms. Maria Rosario Giron pursuant to Sec 32 (B)(6)(b) of the Tax Code. as amended. This refers to your letter dated July 25, 2016. requesting for exemption from

It is represented that Ms. Maria Rosario Giron (TIN: is a former employee of Rose Pharmacy as Shift Manager from September 18. 2006 to June 2. 2016: that on June 2, 2016, Ms. Maria Rosario Giron was involuntarily separated/terminated from the service on the ground of Serious Dishonesty and

the Department of Labor and Employment, Regional Office No. VII. Cebu City. Ms Wiliful Disobedience: that on September 6, 2016, in a Settlement Agreement before

Maria Rosario Giron is expected to receive a separation pay (Php ). last

shall be withheld for the mean time until the result of BIR exemption. pay: sick leave, unpaid overtime pay and 13ih month pay. amounting to (Php release the amount of Php and Php ); and that the amount of tax due on the basis of the separation is Php as tax on other taxable income: that the partics agreed to and the amount of tax duc (Php

heirs from the empioyer as a consequence of separation of such official or employee in the gross income and shall be exempt from taxation under 'T'itle II of the sane Code of 1997. as amended, any amount received by an official or cmployec or by his from the service of the employer due to death. sickness or other physical disability or for any cause beyond the control of the said official or employee shall not be inciuded Code. In reply, please be informed that pursuant to Section 32 (B) (6) (b) of the T'ax

Maria Rosario Giron Page 2 of 2 . :-17-2017

involuntary separation within the contemplation of Section 32 (B) (6) (b) of the Tax connotes involuntariness on the part of the official or employee. The separation from words. the separation must not be of his own making or choice. However. the Code. as amended since her separation is for cause. i.e. "on the ground of Serious Dishonesty and Willful Disobedience" service of the official or employee must not be asked for or initiated hy him. In other separation from the service of Ms. Maria Rosario Giron cannot be considered as an The phrasc "for any cause beyond the control of the said official or employec

Giron pursuant to Sec 32 (B)(6)(b) of the Tax Code, as amended. is hereby denied for request for exemption from withholding tax on separation pay of Ms. Maria Rosario was not due to "for any cause beyond the control of the said official or employee". the lack of legai basis Accordingiy, since the separation from service of Ms. Maria Rosario Giron

However. if upon investigation. it will be disclosed 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.

Very truly yours. a 2

K-I-JRC Commissioner of Internal Revenue CAESAR R. DULAY 002886