6 March 2015

Mr. Raul Villanueva

Vice President, Operations
Philippine Global Systems, Inc.

Dear Mr. Villanueva:

This legal opinion seeks to answer your question on tax treatment of the various
benefits your company is providing to your managerial, supervisory, and rank-and-file
employees.

The following benefits mentioned, being a de minimis benefit as provided in section

33(c) of the National Internal Revenue Code of the Philippines, shall be exempt from
taxation regardless whether an employee is in managerial, supervisory or a rank-and-
file employee:
1. Rice allowance up to Php1,500 (Insert RR here). Here it clearly falls that only
Php1,300 was given by your company thus it is exempted from income tax being
covered under the Php1,500 limit.
2. Uniform allowance up to Php5,000 will be exempted from taxation. Thus, the
remaining Php1,000 will be added to the other income of the employee subject
for taxation if it reaches a total of Php82,000.
3. Laundry allowance of 300 will be exempt since the same amount is provided by
law for laundry allowance under de minimis benefits.
4. Service award
The following will be subject to taxation
1. Meal allowance which are given not during overtime and graveyard shifts. In this
case the Php100 meal allowance given during non-overtime work.
2. Medical Benefit amounting to more than the allowed maximum amount of
Php10,000. In this case the Php2,000 allotted for annual medicine
reimbursement.
3. Company outing
4. Christmas party

I appreciate the opportunity to advise you regarding this matter. Please let me know
if you wish to discuss any of these issues further. Thank you

Transpo????

Atty. Juan de la Cruz, RN, MSc.N