RMC No. 139-2020: Prescribes the guidelines on utilization of 5% tax credit prescribed under PERA Act of 2008

Key points

1. PERA TCC issuance. The 5% credit is evidenced by a PERA Tax Credit Certificate (PERA TCC) with security features. Qualified contributors request it from the PERA Administrator holding their contributions, and where an employer contributes, only the qualified employee may request it.
2. Applying the credit. The PERA TCC is applied against internal revenue taxes according to the contributor’s source of income, with the BIR Forms specified in the Circular. It is entered as 5% PERA TCC and its amount under Other Tax Credits/Payments (specify), and any excess over the tax due is not a refund but is eligible for a new PERA TCC.
3. Filing. Returns are filed through eBIRForms. Hard copies of the return, the PERA TCC and other attachments go to the RDO where the contributor is registered.
4. Employees and employers. The employee gives the PERA TCC to the employer, who applies it in the annual year-end adjustment and keeps it for inspection. Tax withheld above the tax due net of the PERA TCC is refunded, and any PERA TCC excess is carried over against the next taxable year’s withholding tax. Details are shown in the Annual Alphabetical List and BIR Form No. 2316.
5. Employer share. An employer’s share not exceeding the total actually contributed is a deductible expense from gross sales, under the account name Share in Qualified Employee’s PERA Contribution.
6. Spurious certificates and validation. A contributor using a spurious PERA TCC pays the amount utilized with 50% penalty for fraud and 12% interest per annum, without prejudice to criminal charges. AITIED sends a list of qualified contributors to the ISG, which generates a report on deductions claimed, including those without matching information.

Who is affected

• Qualified PERA contributors
• Qualified employees and their employers
• PERA Administrators

Deadlines and effectivity

• Penalty for spurious PERA TCC: 50% plus 12% interest per annum