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REVENUE REGULATIONS NO. 015-2025
Pursuant to Sections 244 and 245 of the Tax Code, these Regulations are hereby promulgated to revise policies and guidelines on the taxability of retirement benefits received by employees under a reasonable private retirement benefit plan.
| WHO | All Internal Revenue Officials, Employees and Others Concerned |
| WHAT | A “Reasonable Private Retirement Benefit Plan” is an employer-maintained plan for some or all employees, where the employer makes contributions to accumulate a fund. This fund is used solely for the benefit of the employees, ensuring that neither the corpus nor the income is diverted for other purposes. A “Trusteed Retirement Plan” is a retirement plan where the assets are managed by a designated trustee for the benefit of employees. Plans that do not meet this definition are known as “Non-Trusteed Plans.” |
| NOTABLE PROVISIONS | Tax Incentives or Privileges – a Retirement Plan duly approved by the Commissioner of Internal Revenue and issued with a certificate of tax qualification for tax exemption (Tax Qualified Plan) are entitled to the following tax incentive and privileges: Exemption from income tax and, consequently from withholding tax, of the retirement benefits and all amounts received by officials and employees of private firms on account of their retirement;Exemption from income tax and, consequently, from withholding tax, of the trust income from various investments made by the trustees of an employee’s trust without prejudice to the investment limitations.Tax deductibility of the following contributions made by employers from its gross income:Contributions to the trust during taxable year to cover the pension liability accrued during that year (Normal Cost); andContributions to the trust during the taxable year in excess of the Normal Cost but only if such amount (1) has not therefore been allowed as a deduction, and (2) is apportioned in equal parts over a period of ten (10) consecutive years beginning with the year in which the transfer or payment is made. Requisites of a Reasonable Retirement Benefit Plan – A retirement plan shall be considered reasonable if it meets the following conditions expressly prescribed under Section 5 of this Regulation. Written ProgramPermanencyCoverageContributionImpossibility of DiversionNon-discriminatory |
| Non-forfeituresForfeitures | |
| Amendments to the Tax Qualified Retirement Plan – Amendments to the Retirement Plan during its operation should also be submitted for certification that the amendment/s do not affect the qualification of the Retirement Plan. Investment – there are no specific limitations provided in the law with respect to investments which may be made by the trustees of an employee’s trust. However, exemptions of the trust income may be denied under the circumstances provided in Section 8 of this regulation. Fees to be Paid by the Employers – An employer shall pay the following fees: Upon issuance of the certificate of qualification for tax exemption Employers not having more than fifty (50) employees₱ 2,000Employers having more than fifty (50) but not over one hundred (100) employees₱ 3,000Employers having more than one hundred (100) employees₱ 5,000Upon issuance of an amendatory certificate of qualification for tax exemption Employers not having more than fifty (50) employees₱ 2,000Employers having more than fifty (50) but not over one hundred (100) employees₱ 3,500Employers having more than one hundred (100) employees₱ 5,000 Provided, employers not having more than five (5) employees shall be exempt from the fees prescribed by these Regulations. Filing of Returns – Trustees of all trusteed Retirement Plans are required to file an annual information return on or before April 15 of each year with the RDO having jurisdiction over the employer together with the copy of the issued Certificate of Qualification. While insurance companies as insurers/custodian of funds of non-trusteed or insured plans should continue to file the regular income tax returns for income or earnings derived from investments of the covered employees’ retirement fund which are subject to income tax. Penalty Clause – any person found violating any of the provisions of these Regulations shall be subject to the imposition of penalties provided for under the existing laws, rules and regulations, in addition to the imposition of penalties pursuant to Chapter II of the Tax Code. | |
| EFFECTIVITY | These Regulations shall take effect fifteen (15) days following its publication in the Official Gazette or the BIR Official Website, whichever comes first. |