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RMC No. 46-2013: Clarifies the taxability of benefits under Collective Negotiations Agreement granted to government employees’ organizations duly approved/accredited by the Civil Service Commission

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Summary

RMC No. 46-2013 clarifies the taxability of benefits under a Collective Negotiations Agreement (CNA) granted to government employees’ organizations approved or accredited by the Civil Service Commission.

Key points

  1. Treatment of CNA incentives. CNA incentives qualify as “other benefits” under Section 32(B)(7)(e) of the Tax Code of 1997. They are exempt from income tax and withholding tax.
  2. Threshold. The exemption holds if the CNA benefits plus the 13th month pay and other benefits do not exceed P30,000.
  3. Excess. Any amount above the threshold is taxable to the employee, whether rank and file or supervisory.

Who is affected

  • Government employees’ organizations approved or accredited by the Civil Service Commission
  • Rank and file and supervisory government employees

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

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