Tax exemptions on retirement plans: Revalidated and clarified

The Philippine Star recently published a news piece on Republic Act (RA) 4197. Below is an excerpt form the news piece:

 

Last June 27, 2013, the BIR issued BIR Ruling No. 234-13 revalidating that the said retirement plan is exempt from final taxes on interest income. This time, however, the BIR observed that the retirement plan provides that the normal retirement date of an employee-member shall be the first day of the month coincident with or next following his 60th birthday provided he has served the company for at least five years of credited service. Consequently, the BIR asserted that the retirement benefits payable to the retiring member shall not be exempt from income tax.

 

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