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October 30, 2009BIR RULING [SB-(049) 689-09]Section 32 (B) (6) (a); BIR Ruling No. 125-98Armed Forces and Police Mutual Benefit Association, Inc.Col. Bonny Serrano cor. E. Delos Santos Avenue,Quezon CityAttention: RADM Rufino S. Lopez, Jr. AFP (Ret)President & CEOGentlemen :This refers to your letter August 13, 2009 requesting a legal opinion on whether or not the retirement benefits of two (2) retired employees should be exempt from withholding tax on compensation. DHITCcIt is represented that the Armed Forces and Police Mutual Benefit Association, Inc. ("AFPMBAI"), with Taxpayer Identification No. 000-848-475-000, is a private non-stock, non-profit organization established to provide insurance and welfare benefits to its members who are members and personnel of the Armed Forces of the Philippines (AFP), Philippine National Police (PNP), Bureau of Fire Protection (BFP), Bureau of Jail Management and Penology (BJMP) and the Philippine Coast Guard (PCG); that in June 2009, two (2) of AFPMBAI's employees — Mr. Alberto M. Alla and Mr. Arthur P. Somera reached the mandatory age of sixty (60) years old under the AFPMBAI Employees' Retirement Plan; that...