RMO No. 66-2016: Amends pertinent provisions of RMO No. 26-2011 prescribing the guidelines in the tax treatment of separation benefits received by officials and employees on account of their separation from employment due to death, sickness or other physical disability and the issuance of Certificate of Tax Exemption from Income Tax and Withholding Tax

Summary

RMO No. 66-2016 amends pertinent provisions of RMO No. 26-2011 on the tax treatment of separation benefits received on separation due to death, sickness or other physical disability, and the issuance of a Certificate of Tax Exemption from Income Tax and Withholding Tax.

Key points

1. Where and what to submit. Requests are filed with the Revenue District Office or the appropriate Large Taxpayers office where the employer is originally registered. They cover separation due to death, sickness, physical disability or any cause beyond the official’s or employee’s control, regardless of age and length of service.
2. Basic documents. A letter request from the official, employee, heirs or employer is required. For death, a certified true copy of the Death Certificate is required.
3. Sickness or disability. Required are sworn affidavits of the physician and the head of office attesting to a serious illness or disability that affects performance and endangers life if work continues. The clinical record and a laboratory examination or medical certificate are also required.
4. Other causes. A written notice goes to the employee and the DOLE Regional Office at least thirty (30) days before termination takes effect. A Board Resolution (juridical entity) or sworn affidavit of the owner (sole proprietor) states the ground: labor-saving devices, redundancy, retrenchment, or closure or cessation of operation. Each ground has its own required statements, and redundancy also needs adequate proof such as the new staffing pattern.
5. Additional documents. The Bureau may require additional documents to prove entitlement to the tax exemption.

Who is affected

• Officials and employees separated from employment, or their heirs
• Employers

Deadlines and effectivity

• Written notice at least thirty (30) days before the effectivity of termination

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