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BUREAU OF INTERNAL REVENUE
The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) 50-2018, 11 May 2018, clarifying certain provisions of Revenue Regulations (RR) Nos. 8-2018 and 11-2018 Implementing the Income Tax Provisions of Republic Act (R.A.) No. 10963, Otherwise Known as “Tax Reform for Acceleration and Inclusion (TRAIN)” Act. The RMC provides answers to the most frequently asked questions on the following income and withholding tax provisions:
- P250,000.00 deduction from taxable income in lieu of personal and additional exemptions of individual taxpayers
- Exclusion from taxable compensation of compulsory contributions by an employee to SSS, GSIS, Pag-IBIG and PhilHealth
- Non-taxability of “de minimis” benefits and the application of the P90,000.00 other benefits exclusion on any excess over the de minimis caps
- Incentives, benefits provided under the Attrition Law, and commissions given to employees as part of compensation subject to withholding tax
- Tax treatment for health card premiums paid by an employer on behalf of its employees
- Qualified Minimum Wage Earners, their tax exempt and non-exempt income items and how to present them on BIR Form No. 1601-C
- Cancellation of the requirement for employees to update their taxpayer status
- Salient features of the eight percent (8%) and graduated income tax rates with emphasis on tax base, allowed deductions, applicable business tax, required financial statements and applicability to a taxpayer’s income classification
- The 8% income tax election, individuals who are not qualified to make such election, and guidelines for qualified individuals
- Other Percentage Taxes under Title V of the Tax Code, as amended
- Refundable deposits and deposits held in trust as items comprising gross receipts
- Tax withholding rates for individual taxpayers engaged in business or practice of profession such as doctors, consultants and contractors.
- Tax withholding rules on payments to individuals hired under a job order or contract for service arrangement
- Taxpayer’s execution of a Sworn Declaration of Gross Receipts or Sales for tax withholding purposes
- Tax withholding on director’s fees
- Exemption from creditable withholding tax of General Professional Partnerships, and their partners’ required registration as professionals
- Substituted Filing requirements for employers and their qualified employees
- Withholding tax forms to use and their respective deadlines
- Proposed changes in the format of Alpha Lists for electronic submission
- Retention and record keeping of books of accounts
RMC No. 50-2018 merely provides a general guidance on the foregoing tax provisions. It must be read in conjunction with the pertinent provisions of the TRAIN Act, the Tax Code and its amendatory regulations.
Attached is the full text of the issuance.
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