RR No. 13-2020: Prescribes the rules and regulations to implement RA No. 10699, titled “An Act Expanding the Coverage of Incentives Granted to National Athletes and Coaches, Appropriating Funds Therefor, Repealing for the Purpose Republic Act No.  9064, also known as the “National Athletes, Coaches and Trainers Benefits and Incentives Act of 2001” or “Sports Benefits and Incentives Act of 2001”.

Summary

RR No. 13-2020 implements Section 4 of RA No. 10699 on the tax privileges of privately-owned establishments that give sales discounts and incentives to National Athletes and Coaches.

Key points

1. Identification and discount. The Philippine Sports Commission Chairman issues a PNSTM ID and Booklet that athletes and coaches present to establishments. Qualified athletes and coaches get a twenty percent (20%) discount on the sales amount exclusive of VAT, for goods and services for their actual and exclusive use or enjoyment.
2. Deduction for establishments. The discount is deductible from gross income as an itemized deduction for the same taxable year it is granted. It is not available to those who use the Optional Standard Deduction (OSD) or the Eight Percent (8%) Income Tax rate under RA No. 10963 (TRAIN Law).
3. Conditions on the deduction. Only the portion of sales exclusively used by the athlete or coach qualifies, and the deduction cannot exceed 20% of the gross selling price or gross receipts, net of VAT if applicable. The gross selling price and the discount must be shown separately on the receipt or invoice.
4. Records and reporting. Establishments keep separate sales records with the name, PNSTM ID Number, gross sales/receipts, discount, date and invoice number. If the name and ID number are missing from the records, the claimed deduction is disallowed. The VAT-exclusive selling price is reported as gross sales for income tax, and for Percentage taxpayers the discounts count in the 3% Percentage Tax computation.
5. Penalties for establishments. A first violation carries a fine of P50,000 to P100,000, or imprisonment of six (6) months to two (2) years, or both. Later violations carry P100,000 to P200,000, or two (2) to six (6) years, or both. Penalties fall on the president, owner or responsible officer of a juridical person, and an alien violator is deported after serving the sentence.
6. Abuse and permits. An athlete or coach who abuses the privileges faces imprisonment of at least six (6) months or a fine of P5,000 to P50,000, or both. Business permits and similar privileges may be cancelled or revoked after complaint, notice and hearing.

Who is affected

• Privately-owned establishments granting discounts to National Athletes and Coaches
• National Athletes and Coaches

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