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Philippines Expands De Minimis Tax Benefits List

by Mary Swire, Tax-News.com, Hong Kong

30 December 2014


The Philippines Government has expanded the list of "de minimis" benefits that are exempt from fringe benefits tax, adding benefits under collective bargaining agreements and productivity incentive schemes.

De minimis benefits are generally limited to facilities offered by employers to their employees that are of relatively small value. Subject to certain limits, they include employees' unused vacation leave credits taken as cash, medical cash allowances, rice subsidies, uniform and clothing allowances, employees' achievement awards, gifts given during Christmas and major anniversary celebrations, and daily meal allowances.

The agreed additions will lift the total amount of annual de minimis benefits in 2015 to PHP104,225 (USD2,330), up by PHP10,000 from the current level of PHP94,225.

Labor and Employment Secretary Rosalinda Dimapilis-Baldoz said that "the Bureau of Internal Revenue (BIR) will issue a new Revenue Regulation to make the measure effective."

Secretary of Finance Cesar V. Purisima noted that the Government is expected to lose PHP16.9bn in annual revenues from the measure, but concluded that "the expansion of tax-exempt de minimis benefits is fairer and more equitable than other measures of tax relief benefiting only a small percentage of the working population."

TAGS: individuals | tax | business | fringe benefits | employees | Philippines | ministry of finance | tax authority | tax breaks | Employment

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