RMC No. 13-2007: Clarifies the tax treatment of reimbursable expenses made by personnel/officials of the government or any of its instrumentalities including government owned or controlled corporations

Summary

RMC No. 13-2007 clarifies the tax treatment of reimbursable expenses of personnel and officials of the government or its instrumentalities, including government owned or controlled corporations (GOCCs).

Key points

1. Treated as RATA or allowances. These reimbursable expenses are considered Representation and Transportation Allowance (RATA) or allowances given to public officers and employees. They reimburse expenses incurred in performing official duties.
2. Personal capacity expenses. The officials or employees make these expenses in their personal capacity, even if the government agency reimburses them.
3. No 5% Final VAT withholding. Because of this, the expenses are not considered government money payments. They are not subject to the withholding of 5% Final Value-Added Tax.

Who is affected

• Personnel and officials of the government and its instrumentalities, including GOCCs

Deadlines and effectivity

• Issued February 13, 2007

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.