RMC No. 135-2016: Circularizes the full text of Implementing Rules and Regulations of RA No. 10754 (An Act Expanding the Benefits and Privileges of Persons with Disability)

Key points

1. 20% discount and VAT exemption. Persons with disability get a twenty percent (20%) discount and Value-Added Tax (VAT) exemption on certain goods and services from all establishments, for their exclusive use, enjoyment or availment. Purchases from sellers not subject to VAT are subject to the applicable Percentage Tax. Later purchases on the same day from the same establishment still get the discount and exemption.
2. Signage. All establishments must place signs in conspicuous areas informing persons with disabilities of the 20% discount and VAT exemption.
3. Establishments’ tax deduction. Establishments may claim the discount as a tax deduction based on the net cost of goods sold or services rendered, in the same taxable year the discount is granted. The deduction, net of VAT if applicable, is included in gross sales receipts for tax purposes and needs proper documentation.
4. Sales records. Records of sales must show the person with disability’s name, PWD identification card number and, if applicable, Tax Identification Number. Without these details, the 20% sales discount claimed as deduction and the input tax attributable to VAT-exempt sale claimed as cost or expense are disallowed.
5. Caregivers and dependents. Tax incentives go to those caring for and living with a person with disability, up to the fourth degree of affinity or consanguinity. The person with disability is treated as a dependent under Section 35(b) of the NIRC of 1997, as amended. This does not raise the maximum of four (4) dependents for additional personal exemption.
6. Further regulations. The BIR will issue a Revenue Regulation on implementing the tax incentives and privileges under the Act.

Who is affected

• Persons with disability
• Establishments selling goods and services
• Individuals caring for and living with a person with disability