This case has been cited 2 times or more.
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2008-11-28 |
NACHURA, J. |
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| This is not the first time that the labor tribunal is faced with the issue of illegal deduction. In Intercontinental Broadcasting Corporation (IBC) v. Amarilla,[42] IBC withheld the salary differentials due its retired employees to offset the tax due on their retirement benefits. The retirees thus lodged a complaint with the NLRC questioning said withholding. They averred that their retirement benefits were exempt from income tax; and IBC had no authority to withhold their salary differentials. The Labor Arbiter took cognizance of the case, and this Court made a definitive ruling that retirement benefits are exempt from income tax, provided that certain requirements are met. | |||||
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2008-11-28 |
NACHURA, J. |
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| Thus, for the retirement benefits to be exempt from the withholding tax, the taxpayer is burdened to prove the concurrence of the following elements: (1) a reasonable private benefit plan is maintained by the employer; (2) the retiring official or employee has been in the service of the same employer for at least ten (10) years; (3) the retiring official or employee is not less than fifty (50) years of age at the time of his retirement; and (4) the benefit had been availed of only once.[43] | |||||