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Is Gratuity Pay taxable?

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1 Is Gratuity Pay taxable? on Mon Jun 18, 2012 9:56 am

amiled33


Arresto Menor
Dear Atty,

Is gratuity pay taxable or not?
I'm a bit confused on the BIR rulings:

http://www.bir.gov.ph/taxcode/1638.htm
>>> It is non taxable (with provision)

http://www.bir.gov.ph/taxinfo/tax_withld.htm
>>> It is non taxable

But our company deducted a w/tax due to provision on gross income (http://www.bir.gov.ph/taxcode/1638.htm)that I have to meet the 2 criterias:

1.Service in the company not less than 10 years: QUALIFIED
2.Note less than 50 years of age: NOT QUALIFIED

And also in addition that I resigned from the company.

I'm hoping for your clarification re. this matter.

Thank you!




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2 Re: Is Gratuity Pay taxable? on Thu Jun 21, 2012 7:20 pm

attyLLL


moderator
my first question is whether this supposed gratuity falls within what is defined as gratuity under the tax code. read it carefully.


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3 Re: Is Gratuity Pay taxable? on Fri Jun 22, 2012 8:33 am

amiled33


Arresto Menor
Thanks for your reply.

The company said it is a gratuity pay for long years of service, they mentioned that it is like a financial assistance.

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4 Re: Is Gratuity Pay taxable? on Fri Jun 22, 2012 9:04 pm

attyLLL


moderator
then i would argue that if it is not given upon retirement or separation, then it is just another kind of bonus which is taxable.


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5 Re: Is Gratuity Pay taxable? on Mon Jun 25, 2012 8:49 am

amiled33


Arresto Menor
thank you for clarification Smile

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6 Re: Is Gratuity Pay taxable? Today at 3:50 am

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