Regulations Update: BIR Regulations Implementing Expanded Senior Citizens Act

The Bureau of Internal Revenue recently issued Revenue Regulations No. 07-10 (the “Regulations”), which implement Republic Act No. 9994, otherwise known as the Expanded Senior Citizens Act of 2010.

The major provisions of the Regulations include the following:

A.      Income tax and other taxes

In general, Senior Citizens must file income tax returns and pay income tax. However, the Senior Citizen is exempt from paying income tax if his returnable income is in the nature of compensation income and he qualifies as a minimum wage earner under RA No. 9504. The Senior Citizen is also exempt from income tax if the aggregate amount of gross income earned by the Senior Citizen during the taxable year does not exceed the amount of his personal exemptions (basic and additional).

Under the Regulations, the Senior Citizen can avail of income tax exemption only upon compliance with certain requirements. These are:

1.     the Senior Citizen must first be qualified as such by the Commissioner of Internal Revenue or his duly authorized representative (i.e., the Revenue District Officer (RDO)) having jurisdiction over the place where the Senior Citizen resides), by submitting a certified true copy of his Senior Citizen Identification Card (OSCA ID) issued by the OSCA of the city or municipality where he resides;

2.     the Senior Citizen must file a Sworn Statement on or before January 31 of every year that his annual taxable income for the previous year does not exceed the poverty level as determined by the NEDA thru the NSCB; and

3.     if qualified, his name shall be recorded by the RDO in the Master List of Tax-Exempt Senior Citizens for that particular year, which the RDO is mandatorily required to keep.

Continue reading