REVENUE MEMORANDUM CIRCULAR NO. 139-2020 issued on December 23, 2020 prescribes the guidelines on the utilization of 5% tax credit prescribed under Republic Act No. 9505 (PERA Act of 2008).
The PERA Tax Credit Certificate (PERA TCC) containing security features will evidence the 5% tax credit. Qualified contributors shall directly request for the issuance of PERA TCC from the PERA Administrator to whom they have placed their contributions. In cases of employers who contribute a share to the account of their qualified employee, only the qualified employee can request for the issuance of PERA TCC. The PERA Administrator shall release the PERA TCC to the qualified contributors or their authorized representatives.
The PERA TCC shall be applied against the internal revenue taxes and the BIR Forms to be accomplished shall depend on the source of income of the qualified contributor from which the savings or contributions to his or her account where derived from, which are specified in the Circular.
In case of changes in the contributor’s source of income during the taxable year, the PERA TCC shall contain such restrictions prescribing the type of taxes upon which the said certificate shall be applied to, based on the contributor’s status/classification as indicated in the annual report of the PERA Administrator. Accordingly, the applicable internal revenue taxes shall be paid and the corresponding BIR Forms to be accomplished are specified in the Circular.
The amount of the PERA TCC shall be indicated in the tax return as deduction from the tax due of the contributor. Specifically, indicate the phrase “5% PERA TCC” and its corresponding amount in the boxes provided for in the line item of the tax return, which states the phrase “Other Tax Credits/Payments (specify)” located immediately after the line item stating “Tax Due”. In case the amount of PERA TCC exceeds the tax due, net of the creditable taxes, the excess shall not be considered a refund but the same shall be eligible for the issuance of PERA TCC.
The accomplished tax return shall be filed using the eBIRForms facility and the tax due, if any, shall be paid using the available modes of payment of the BIR. The duly received hard copies of the tax returns, together with copy/ies of the PERA TCC and the other prescribed attachments, shall be submitted to the Revenue District Office (RDO) where the contributor is duly registered, pursuant to the existing revenue guidelines and procedures.
Upon receipt of the PERA TCC from the PERA Administrator, the qualified contributor employee shall submit the same to his or her employer. The employer shall apply the amount of the PERA TCC in the annual year-end adjustments for computing the net Withholding Tax due of the qualified contributor-employee.
If the total tax actually withheld and remitted to the BIR is more than the difference between the total tax due and the gross amount of PERA TCC, the excess shall be refunded to the qualified contributor-employee. However, if the gross amount of the PERA TCC shall exceed the total tax due, the excess shall be carried over and deducted from the Withholding Tax of the qualified contributor-employee in the next taxable year. On the other hand, the total amount actually withheld and remitted to the BIR shall be refunded by the employer to the qualified contributor employee.
The employer shall keep the submitted PERA TCC and produce the same when requested for inspection or verification by authorized BIR revenue personnel. Further, the applicable details of the certificate shall be indicated in the column provided for the purpose in the prescribed Annual Alphabetical List of Employees, including the Certificate of Compensation Payment/Tax Withheld for Compensation Payment With or Without Tax Withheld (BIR Form No. 2316) of the qualified contributor-employee.
For employers with share in its employee’s PERA contribution, the employer’s share not exceeding the total amount actually contributed may be reflected in the Income Tax return as deductible expense from its gross sales. For uniformity, the phrase “Share in Qualified Employee’s PERA Contribution” shall be used as the account name.
Without prejudice to the filing of appropriate criminal charges, the qualified contributor who uses spurious PERA TCC shall be liable to pay the amount utilized with 50% penalty for fraud and 12% interest per annum.
For purposes of validating the availments of PERA TCCS, the Chief, Audit Information Tax Incentives & Exemption Division (AlTIED) shall transmit to the concerned office in the Information Systems Group (ISG) a list of taxpayers who are qualified contributors who have been issued PERA TCCs. The concerned ISG office shall generate a report containing, among others, the qualified contributors who have deducted the amounts of PERA TCCs in their tax returns, including those deductions but without the corresponding information from the AITIED list.
Copies of this report shall be transmitted to Chief, AlTIED and the Chief, Collection Section of the concerned RDO.