Reimbursement of Actual Transportation Expenses

REIMBURSEMENT FROM ACTUAL TRANSPORTATION EXPENSES MUST BE SUFFICIENTLY ESTABLISHED

As correctly observed by the CTA Second Division and the CTA En Banc, petitioner was not able to sufficiently establish that the transportation expenses reflected in their books were reimbursement from actual transportation expenses incurred by its employees in connection with their duties as the only document presented was a Schedule of Transportation Expenses without pertinent supporting documents.

Without said documents, such as but not limited to, receipts, transportation-related vouchers and/or invoices, there is no way of ascertaining whether the amounts reflected in the schedule of expenses were disbursed for transportation.

First Lepanto Taisho Insurance Corp. v. Commissioner of Internal Revenue, G.R. No. 197117, April 10, 2013, 708 PHIL 616-625

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Taxability of Separation Pay

TAXABILITY OF SEPARATION PAY

Pursuant to Section 32 (B) (6) (b) of the Tax Code of 1997, as amended, any amount received by an official or employee or by his heirs from the employer as a consequence of separation of such official or employee from the service of the employer due to death, sickness or other physical disability or for any cause beyond the control of the said official or employee shall not be included in the gross income and shall be exempt from taxation under Title II of the same Code.

The phrase “for any cause beyond the control of the said official or employee” connotes involuntariness on the part of the official or employee. The separation from service of the official or employee must not be asked for or initiated by him. In other words, the separation must not be of his own making or choice. However, the separation from the service of Ms. Maria Rosario Giron cannot be considered as an involuntary separation within the contemplation of Section 32 (B) (6) (b) of the Tax Code, as amended since her separation is for cause, i.e., “on the ground of Serious Dishonesty and Willful Disobedience.”

Accordingly, since the separation from service of Ms. Maria Rosario Giron was not due to “for any cause beyond the control of the said official or employee,” the request for exemption from withholding tax on separation pay of Ms. Maria Rosario Giron pursuant to Sec. 32 (B) (6) (b) of the Tax Code, as amended, is hereby denied for lack of legal basis.

Rose Pharmacy, BIR Ruling No. 002-17, January 12, 2017

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Proof of Withholding Tax (BIR)

PROOF OF WITHHOLDING

Certificates of Final Taxes Withheld issued by the Agent Banks are sufficient evidence to establish the withholding of the taxes.

In Commissioner of Internal Revenue v. Philippine National Bank: “The certificate of creditable tax withheld at source is the competent proof to establish the fact that taxes are withheld. It is not necessary for the person who executed and prepared the certificate of creditable tax withheld at source to be presented and to testify personally to prove the authenticity of the certificates.”

Philippine Airlines, Inc. v. Commissioner of Internal Revenue, G.R. Nos. 206079-80 & 206309, January 17, 2018

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