February 17, 2009
BIR RULING [SB-(012) 101-09]
Section 32 (B) (6) (b); SB-004-2006 dtd. 11/30/06
Tahanan Mutual Building Loan Association
9/F Ramon Cojuangco Building
Makati Avenue, Makati City
Attention: Ma. Luz Natividad A. Lim
President
Gentlemen :
This refers to your letter dated November 13, 2008, requesting a confirmatory ruling on your opinion that the separation pay to be given to the employees of TAHANAN MUTUAL BUILDING AND LOAN ASSOCIATION pursuant to a manpower reduction program is not subject to income tax and consequently to withholding tax on wages pursuant to Section 32 (B) (6) (b) of the Tax Code of 1997.
It is represented that TAHANAN MUTUAL BUILDING AND LOAN ASSOCIATION (TAHANAN, for short) with TIN: 001-879-655-000, is a corporation duly organized and existing under the laws of the Philippines; that TAHANAN will terminate the employment of employees whose positions are rendered redundant due to process improvements and automation of function resulting to a collapsing/merging of function which necessitates the reduction of current work force to match the reduction of work loan; that TAHANAN will be paying the affected employees one hundred percent...
