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8 Tips To Pay Taxes Without Paying A Single Centavo "The Legal Way" Part 3 Tax Incentives

Tax incentives for employers to provide persons with disability, equal opportunity for employment and equal remuneration for work of equal value. Towards this end, the State shall facilitate access of persons with disability to labor market information, capacity building programs, and wage employment.

1. Private entities that employ qualified disabled persons either as regular employee, apprentice
or learner shall be entitled to an additional deduction from their gross income for the taxable
year, in an amount equivalent to 25% of the total amount of paid as salaries/wages to disabled
persons, over and above the total allowable ordinary and necessary business deductions for
said salaries and wages.     – Rev Reg no. 8-93          

10 employees                                     10 PWD employees
Annual Salary                                       Annual Salary
180,000 X 10 = 1,800,000.00              180,000 X 10 = 1,800,000.00
Deduction 100%                                  Deduction 125%
Salary Expense  1,800,0000.00          Salary Expense  2,250,0000.00 
                                                         Addition Salary deduction 450,000.00         

2.  Private entities that improve of modify their physical facilities in order to provide reasonable accommodation for PWDs shall be  entitled to an additional deduction from their net income, equivalent to fifty percent (50%) of direct cost of the improvements or modifications. This Section, however, does not apply to improvements or modifications of facilities required under B.P Blg. 344 

Improvements                                       Improvements beyond the required modifications under B.P 344
1,000,000.00                                       1,000,000.00
Deduction 100%                                  Deduction 150%
Expense  1,000,0000.00                      Expense  1,500,0000.00 
                                                         Additional deduction 500,000.00         

Section 7. Implementation of One Percent (1%)

7.1 For Government Agencies
At least one percent (1%) of all regular and non-regular positions in all government agencies shall be reserved for persons with disability.
Should there be fraction in coming up with the sum of at least one percent (1%) of the total plantilla position in a government agency, the same shall be considered as one (1) position reserved for persons with disability.

Government agencies that are currently employing PWDs with at least 1% of the total positions shall be considered compliant with this IRR. However, nothing in this rule shall prevent compliant government agencies from hiring more PWDs, nor shall allow them to diminish the number of currently employed and qualified persons with disability.

However, in cases where no qualified PWD applies for the available position, the concerned agency has the option to hire non-PWD applicant.

We can help PWD to exercise their right to be employed reserved for persons with disability.

7.2 For Private Corporations
Private corporations with more than one hundred (100) employees are encouraged to reserved at least one percent (1%) of all positions for PWDs. However, nothing in this rule shall prevent private corporations with less than 100 employees from hiring PWDs.

                  3 Steps to avail the tax incentives

a.Submit a request letter  to DOLE that your company is requesting a Certification of Employment of PWDs. Dole representative will visit your company to check if the working environment is PWD friendly before they can issue the Certification of Employment of PWDs
Certification of Employment of PWDs (TI-Form 1)

This form shall serve as proof for establishments employing PWDs and shall be
submitted to the Bureau of Internal Revenue (BIR) for availment of tax incentive.

b.Employment Report (TI-Form 2)
At the end of the year, the employer shall submit to the DOLE Employment Report.  


Employment Report.

2.     BIR RR No. 8-93

a.     File the Certification of Employment of PWDs (TI-Form 1) at the BIR Assessment division.
Attached a letter that your are availing the 125% Salary deduction based on RR 8-93.
b.     File the certified schedule of actual expense for improvement of facilities to accommodate disabled persons.
c.    Certification by the local government building inspector and the NCWP, Provided that the additional deduction allowed shall not apply to improvement of facilities required under Bp. No. 344

3.        Audited Financial Statement

Your auditor should  also disclose the basis of 125% pwd employee salary and 150% improvement expense  is based on RR8-93.

To view all the applicable laws on PWD employment, Please click the link below
Employers have recognized for some time that it's smart business to have a diverse workforce - one in which many views are represented and everyone's talents are valued. Well, disability is part of diversity.  - Thomas Perez

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