REVENUE REGULATIONS (RR) NO. 022-2025
This Circular clarifies that pursuant to Sections 244 and 245 of the National Internal Revenue Code of 1997, as amended (Tax Code) in relation to Section 9 of RA No. 12214 otherwise known as the Capital Markets Efficiency Promotion Act (CMEPA), these Regulations are hereby promulgated to further amend Section 7(B) of RR No. 17-2011 by revising guidelines on the allowed deduction which the employer may claim from his/its qualified contribution to employee’s PERA under RA No. 9505. otherwise known as the PERA Act of 2008.
An employer may deduct its actual Qualified Employer’s Contribution from gross income, but only up to the amount that completes the employees’ maximum allowable PERA contribution. Additionally, private employers who make voluntary contributions to their employee’s PERA are entitled to an additional 50% deduction, provided that:
- The employer must contribute an amount at least equal to the employee’s contribution, subject to the maximum allowable contribution under RR No. 17-2011, as amended by RR No. 7-2023, provided that the employee has also contributed within the same calendar year; and
- Only employers that contribute to all their employees’ PERA shall be eligible for the additional allowable deduction.
Qualified Employer’s Contributions that qualify for deduction are exempt from withholding tax on compensation. For this purpose, a certificate of actual contribution amount will be issued by the Administrator.
These contributions shall be recorded under the account name “Share in Qualified Employee’s PERA Contribution” and shall be fully disclosed in the Notes to Financial Statements.