REVENUE MEMORANDUM CIRCULAR NO. 13-2007 issued on February 13, 2007 clarifies the tax treatment of reimbursable expenses made by personnel/officials of the government or any of its instrumentalities including government owned or controlled corporations (GOCCs).

            Said reimbursable expenses are considered as Representation and Transportation Allowance (RATA) or allowances given to public officers and employees, which constitute reimbursement for expenses incurred in the performance of government personnel’s official duties. These are expenses made by such government officials/employees in their personal capacity even if reimbursed by the government agency. As such, these expenses are not considered as government money payments and are, therefore, not subject to the withholding of 5% Final Value-Added Tax.