REVENUE REGULATIONS NO.

5-2017– Rules and Regulations

Implementing Republic Act No. 10754 – Magna Carta for
Disabled persons

S E C T I O N 1 . S C O P E - P U R S U A N T T O T H E P R O V I S I O N S O F S E C T I O N 2 4 4 O F T H E TA X C O D E O F
1 9 9 7 , A S L A S T A M E N D E D B Y R E P U B L I C A C T N O . 9 5 0 4 , I N R E L AT I O N T O S E C . 3 O F R E P U B L I C
A C T ( R . A . ) N O . 1 0 7 5 4 , O T H E R W I S E K N O W N A S “A N A C T E X PA N D I N G T H E B E N E F I T S A N D
P R I V I L E G E S O F P E R S O N S W I T H D I S A B I L I T Y ” ( H E R E I N A F T E R R E F E R R E D T O A S T H E “A C T ” ) ,
T H E S E R E G U L AT I O N S A R E H E R E B Y P R O M U L G AT E D T O :

1 . P R E S C R I B E T H E G U I D E L I N E S F O R T H E I M P L E M E N TAT I O N O F T H E TA X P R I V I L E G E S O F
P E R S O N S W I T H D I S A B I L I T Y A N D T H E I R B E N E FA C TO R ; A N D TA X I N C E N T I V E S F O R
E S TA B L I S H M E N T S G R A N T I N G T W E N T Y P E R C E N T ( 2 0 % ) S A L E S D I S C O U N T A N D E X E M P T I O N
F R O M VA L U E - A D D E D TA X ( VAT ) U N D E R S E C T I O N S 3 2 A N D 3 3 O F R . A . 7 2 7 7 , A S A M E N D E D
B Y R . A . N O . 9 4 4 2 , O T H E R W I S E K N O W N A S T H E “ M A G N A C A R TA F O R P E R S O N S W I T H
DISABILITY” AND R.A. NO. 10754; AND
2 . A M E N D C E R TA I N P R O V I S I O N S O F R E V E N U E R E G U L AT I O N S N O . 1 - 2 0 0 9 .
SECTION 2. DEFINITION OF TERMS

F O R P U R P O S E S O F T H E S E R E G U L AT I O N S , T H E F O L L O W I N G T E R M S A N D P H R A S E S S H A L L
BE DEFINED AS
FOLLOWS:
2 . 1 A C T – S H A L L R E F E R TO R E P U B L I C A C T N O . 7 2 7 7 , A S A M E N D E D BY R E P U B L I C A C T
N O . 9 4 4 2 OT H E R W I S E K N O W N A S T H E “ M A G N A C A R TA F O R P E R S O N S W I T H
D I S A B I L I T Y ” A N D R . A . N O . 1 0 7 5 4 OT H E R W I S E K N O W N A S “A N A C T E X PA N D I N G T H E
BENEFITS AND PRIVILEGES OF PERSONS WITH DISABILITY (PWD)”
2 . 2 P E R S O N W I T H D I S A B I L I T Y ( P W D ) – A R E T H O S E W H O H AV E A L O N G - T E R M P H Y S I C A L ,
M E N TA L , I N T E L L E C T U A L O R S E N S O R Y I M PA I R M E N T S W H I C H I N I N T E R A C T I O N W I T H
VA R I O U S B A R R I E R S M AY H I N D E R T H E I R F U L L A N D E F F E C T I V E PA R T I C I PAT I O N I N S O C I E T Y
O N A N E Q U A L B A S I S W I T H OT H E R S . F O R P U R P O S E S O F T H E S E R E G U L AT I O N S , T H E T E R M
“ P W D ” S H A L L B E F U R T H E R C L A S S I F I E D / C AT E G O R I Z E D BY T H E D E PA R T M E N T O F H E A LT H
(DOH).
2 . 3 D I S A B I L I T Y – S H A L L M E A N A P H Y S I C A L O R M E N TA L I M PA I R M E N T T H AT
S U B S TA N T I A L LY L I M I T S O N E O R M O R E P S YC H O L O G I C A L , P H Y S I O L O G I C A L O R
A N ATO M I C A L F U N C T I O N O F A N I N D I V I D U A L O R A C T I V I T I E S O F S U C H I N D I V I D U A L S , A
R E C O R D O F S U C H A N I M PA I R M E N T; O R B E I N G R E G A R D E D A S H AV I N G S U C H A N
I M PA I R M E N T.
2 . 4 B E N E FA C T O R – S H A L L R E F E R T O A F I L I P I N O C I T I Z E N O R R E S I D E N T A L I E N , C A R I N G F O R ,
G I V I N G C H I E F S U P P O R T A N D L I V I N G W I T H T H E P W D , W H O I S I N T H E F O U R T H ( 4 TH) C I V I L
D E G R E E O F C O N S A N G U I N I T Y O R A F F I N I T Y C L A I M I N G S U C H P W D A S D E P E N D E N T.

2. 5 P WD -D E P E N D E NT – SH AL L R E FE R TO A FI L IP INO C I T I ZE N WH O I S A P WD, WH E T H E R
M I N O R O R O F L E G A L A G E , R E L AT E D T O T H E B E N E FA C T O R W I T H I N T H E F O U R T H ( 4 T H ) C I V I L
D E G R E E O F C O N S A N G U I N I T Y O R A F F I N I T Y, N O T G A I N F U L LY E M P L O Y E D A N D W H O I S L I V I N G
W I T H A N D C H I E F LY D E P E N D E N T U P O N S U C H B E N E FA C T O R F O R H I S / H E R S U P P O R T.

2.6 S A L E S D I S C O U N T – S H A L L R E F E R T O T H E A C T U A L D I S C O U N T, O R T H AT D I S C O U N T, O R
T H AT D I S C O U N T W H I C H I N N O C A S E S H A L L E X C E E D 2 0 % O F T H E G R O S S S E L L I N G P R I C E O F
G O O D S S O L D O R S E R V I C E S R E N D E R E D T O P W D B Y C E R TA I N B U S I N E S S E S TA B L I S H M E N T S
E N U M E R AT E D U N D E R T H E A C T A N D T H E S E R E G U L AT I O N S .

2 . 7 E S TA B L I S H M E N T – S H A L L R E F E R T O A N Y E N T I T Y, P U B L I C O R P R I VAT E , D U LY L I C E N S E D
A N D / O R A U T H O R I Z E D B Y T H E N AT I O N A L G O V E R N M E N T A G E N C I E S O R B Y T H E L O C A L
G O V E R N M E N T U N I T S T O O P E R AT E .
S E C T I O N 3 . S A L E S D I S C O U N T S W H I C H M AY B E C L A I M E D B Y Q U A L I F I E D P E R S O N S W I T H
DISABILITY (PWD).
Q U A L I F I E D P W D S H A L L B E E N T I T L E D T O C L A I M AT L E A S T T W E N T Y P E R C E N T ( 2 0 % ) D I S C O U N T
F R O M T H E F O L L O W I N G E S TA B L I S H M E N T S R E L AT I V E T O T H E S A L E O F G O O D S A N D S E R V I C E S
F O R T H E I R E X C L U S I V E U S E A N D E N J O Y M E N T O R AVA I L M E N T O F T H E P W D :
3 . 1 H O T E L S A N D S I M I L A R L O D G I N G E S TA B L I S H M E N T S ; R E S TA U R A N T S A N D R E C R E AT I O N
CENTERS;
3 . 2 T H E AT E R S , C I N E M A H O U S E S , C O N C E R T H A L L S , C I R C U S E S , C A R N I VA L S A N D O T H E R
S I M I L A R P L A C E S O F C U LT U R E , L E I S U R E A N D A M U S E M E N T;
3.3 AL L D R UG STO RES R EG AR D ING P URC H ASE O F G E N E R I C AN D B R AN D E D MEDI C INE;
3 . 4 M E D I C A L A N D D E N TA L S E R V I C E S I N C L U D I N G D I A G N O S T I C A N D L A B O R AT O R Y F E E S ( E . G . ,
X - R AY S , C O M P U T E R I Z E D T O M O G R A P H Y S C A N S A N D B L O O D T E S T S ) A N D P R O F E S S I O N A L F E E S
O F AT T E N D I N G D O C T O R S I N A L L G O V E R N M E N T FA C I L I T I E S O R A L L P R I VAT E H O S P I TA L S A N D
M E D I C A L FA C I L I T I E S S U B J E C T T O T H E G U I D E L I N E S T O B E I S S U E D B Y T H E D O H , I N
C O O R D I N AT I O N W I T H T H E P H I L I P P I N E H E A LT H I N S U R A N C E C O R P O R AT I O N ( P H I L H E A LT H ) ;
3 . 5 D O M E S T I C A I R A N D S E A T R A N S P O R TAT I O N B A S E D O N T H E A C T U A L FA R E . F O R
P R O M O T I O N A L FA R E S , T H E P W D C A N AVA I L T H E E S TA B L I S H M E N T ’ S O F F E R E D D I S C O U N T O R
T H E 2 0 % D I S C O U N T P R O V I D E D H E R E I N , W H I C H E V E R I S H I G H E R A N D M O R E F AV O R A B L E ;
3 . 6 L A N D T R A N S P O R TAT I O N P R I V I L E G E S B A S E D O N T H E A C T U A L FA R E S U C H A S , P U B L I C
U T I L I T Y B U S E S O R J E E P N E Y S ( P U B S / P U J S ) . TA X I S , A S I A N U T I L I T Y V E H I C L E S ( A U V S ) , S H U T T L E
S E R V I C E S A N D P U B L I C R A I LWAY S S U C H A S L I G H T R A I L T R A N S I T ( L R T ) , M E T R O R A I L T R A N S I T
( M R T ) , P H I L I P P I N E N AT I O N A L R A I LWAY S ( P N R ) , A N D S U C H O T H E R S I M I L A R I N F R A S T R U C T U R E
T H AT W I L L B E C O N S T R U C T E D , E S TA B L I S H E D A N D O P E R AT E D B Y P U B L I C O R P R I VAT E E N T I T Y;
AND
3 . 7 F U N E R A L A N D B U R I A L S E R V I C E S F O R T H E D E AT H O F T H E P W D : P R O V I D E D , T H AT T H E
BENEFICIARY OR ANY PERSON WHO SHALL SHOULDER THE FUNERAL AND BUR IAL EXPENSES
OF THE DECEASED PWD SHALL CLAIM THE DISCOUNT UNDER THIS RULE FOR THE DECEASED
P W D U P O N P R E S E N TAT I O N O F T H E D E AT H C E R T I F I C AT E A N D P W D I D E N T I F I C AT I O N C A R D ( I D )
OR IN ITS ABSENCE, THE
O R I G I N A L O R C E R T I F I E D T R U E C O P Y O F T H E P R O O F O F R E G I S T R AT I O N F R O M T H E I S S U I N G
L O C A L G O V E R N M E N T U N I T. S U C H E X P E N S E S S H A L L C O V E R T H E P U R C H A S E O F C A S K E T O R
U R N , E M B A L M I N G , H O S P I TA L M O R G U E , T R A N S P O R T O F T H E B O D Y T O I N T E N D E D B U R I A L S I T E
I N T H E P L A C E O F O R I G I N , B U T S H A L L E X C L U D E O B I T U A R Y P U B L I C AT I O N A N D T H E C O S T O F
T H E M E M O R I A L L O T.
A L L O T H E R G O O D S A N D S E R V I C E S S O L D B Y T H E F O R E G O I N G E S TA B L I S H M E N T S N O T
I N C L U D E D I N T H E A B O V E E N U M E R AT I O N E X P R E S S LY P R O V I D E D B Y L AW S H A L L N O T B E
C O N S I D E R E D F O R T H E 2 0 % D I S C O U N T P R I V I L E G E N O T W I T H S TA N D I N G T H AT T H E S A M E A R E
F O R T H E E X C L U S I V E U S E A N D E N J O Y M E N T O R AVA I L M E N T O F T H E P W D .
S E C T I O N 4 . C O M P U TAT I O N O F T H E D I S C O U N T A N D VAT E X E M P T I O N G R A N T E D T O
Q U A L I F I E D P E R S O N S W I T H D I S A B I L I T Y.

VAT O N S A L E O F G O O D S O R S E R V I C E S W I T H S A L E S D I S C O U N T S G R A N T E D B Y B U S I N E S S
E S TA B L I S H M E N T S E N U M E R AT E D U N D E R S E C T I O N 3 H E R E O F S H A L L B E C O M P U T E D I N
ACCORDANCE WITH THE FOLLOWING FORMULA:

A M O U N T O F S A L E ( W I T H VAT ) P 1 , 1 2 0 . 0 0
L E S S : 1 2 % VAT 120.00
T O TA L A M O U N T 1,000.00
LESS: 20% SALES DISCOUNT 200.00
T O TA L A M O U N T D U E P800.00

T H E T W O H U N D R E D P E S O S ( P 2 0 0 . 0 0 ) C O S T O F T H E D I S C O U N T I N T H E A B O V E I L L U S T R AT I O N ,
SHALL BE ALLOWED AS A DEDUCTION FROM GROSS INCOME FOR THE SAME TAXABLE YEAR
T H AT T H E D I S C O U N T I S G R A N T E D : P R O V I D E D T H AT, T H E T O TA L A M O U N T O F T H E C L A I M E D
TA X D E D U C T I O N N E T O F VAT, I F A P P L I C A B L E , S H A L L B E I N C L U D E D I N T H E I R G R O S S S A L E S
R E C E I P T S F O R TA X P U R P O S E S A N D S H A L L B E S U B J E C T T O P R O P E R D O C U M E N TAT I O N I N
A C C O R D A N C E W I T H T H E P R O V I S I O N S O F T H E TA X C O D E . T H I S M E A N S T H AT F O R T H E
E S TA B L I S H M E N T T O B E A L L O W E D T O C L A I M T H E D I S C O U N T A S A D E D U C T I O N , T H E A M O U N T
O F S A L E S T H AT M U S T B E R E P O R T E D F O R I N C O M E TA X P U R P O S E S I S T H E VA T - E X C L U S I V E
SELLING PRICE OF P1,000.00 AND NOT THE AMOUNT OF SALES NET OF TH E DISCOUNT –
P800.00.
S E C T I O N 5 . AVA I L M E N T B Y E S TA B L I S H M E N T S O F S A L E S D I S C O U N T S A S D E D U C T I O N F R O M
GROSS INCOME.

E S TA B L I S H M E N T S G R A N T I N G S A L E S D I S C O U N T S T O P W D O N T H E I R S A L E O F G O O D S A N D / O R
SERV I C ES SH AL L BE EN T I TLED TO D ED UC T T H E SAI D SAL ES D I SCO UNT FRO M T H EI R G RO SS
I N COM E SUBJ EC T TO T H E FO L LOWING CO N DITIONS:

5 . 1 A L L E S TA B L I S H M E N T S W H I C H G R A N T E D S A L E S D I S C O U N T S O N T H E I R SA L E O F G O O D S
A N D / O R S E R V I C E S T O P W D M AY C L A I M T H E S A I D D I S C O U N T A S D E D U C T I O N F R O M T H E
G R O S S I N C O M E F O R T H E S A M E TA X A B L E Y E A R T H AT T H E D I S C O U N T I S G R A N T E D ; P R O V I D E D
T H AT, T H E N A M E O F P W D A N D T H E P W D I D E N T I F I C AT I O N C A R D ( P W D I D ) N O . A R E
REFLECTED IN THE REQUIRED RECORD OF SALES
FOR PWD.

A S E X P R E S S LY P R O V I D E D B Y L AW, T H E T O TA L A M O U N T O F T H E C L A I M E D TA X D E D U C T I O N
N E T O F VAT, I F A P P L I C A B L E , S H A L L B E I N C L U D E D I N T H E I R G R O S S S A L E S R E C E I P T F O R TA X
P U R P O S E S A N D S H A L L B E S U B J E C T T O P R O P E R D O C U M E N TAT I O N A N D T O T H E P R O V I S I O N S
O F N AT I O N A L I N T E R N A L R E V E N U E C O D E ( N I R C ) , A S A M E N D E D , T H U S I F T H E R E A R E N O
N A M E O F P W D A N D P W D I D E N T I F I C AT I O N C A R D ( P W D I D ) N O . I N T H E R E C O R D S O F S A L E S ,
T H E S A L E S D I S C O U N T C L A I M E D A S D E D U C T I O N B Y B U S I N E S S E S TA B L I S H M E N T S S H A L L B E
DISALLOWED.
F O R P E R C E N TA G E TA X PAY E R , T H E A M O U N T O F S A L E S D I S C O U N T S S H A L L B E E X C L U D E D F O R
P U R P O S E S O F C O M P U T I N G T H E T H R E E P E R C E N T ( 3 % ) P E R C E N TA G E TA X B U T S H A L L B E I N C L U D E D
A S PA R T O F T H E G R O S S S A L E S / R E C E I P T S F O R I N C O M E TA X P U R P O S E S . T H E S A L E S D I S C O U N T
GRANTED SHALL THEN BE ACCOUNTED AS DEDUCTION FROM THE GROSS INCO ME OF THE
E S TA B L I S H M E N T F O R T H E S A M E TA X A B L E Y E A R T H AT T H E D I S C O U N T WA S G R A N T E D .

C O M P U TAT I O N O F D I S C O U N T O N N O N - VAT TA X PAY E R :

SALES/RECEIPTS P1,12 0.00

LESS:20% DISCOUNT 224.00
A M T. PAYA B L E B Y P W D / R E C E I V E D B Y S E L L E R 896.00
M U LT I P LY B Y TA X R AT E X 3%
P E R C E N TA G E TA X D U E P26. 88

5 . 2 O N LY T H AT P O R T I O N O F T H E G R O S S S A L E S E X C L U S I V E LY U S E D , C O N S U M E D O R E N J O Y E D B Y
T H E P W D S H A L L B E E L I G I B L E F O R T H E D E D U C T I B L E S A L E S D I S C O U N T;

5.3 THE SELLER MUST RECORD ITS SALES INCLUSIVE OF THE DISCOUNT G RANTED, NOT AS A
R E D U C T I O N O F S A L E S T O A R R I V E AT N E T S A L E S , B U T A S A D E D U C T I O N F R O M I T S G R O S S I N C O M E
( S A L E S L E S S C O S T O F S A L E S ) . T H U S T H E E N T R Y T O R E C O R D T H E T R A N S A C T I O N A S I L L U S T R AT E D I N
SECTION 4 AND SECTION 5.1 HEREOF IN THE BOOKS OF THE SELLER SHOU LD BE AS FOLLOWS:

A . VAT
DEBIT – CASHP800
DEBIT – PWD DISCOUNT EXPENSE 200
CREDIT – SALES P1,000B.

N O N - VAT
DEBIT – CASHP896
DEBIT – PWD DISCOUNT EXPENSE224CREDIT – SALES P1,120 ###DEBIT –
P E R C E N TA G E TA X D U E P 2 6 . 8 8 C R E D I T – TA X PAYA B L E P 2 6 . 8 8
A . VAT
DEBIT – CASH P800
DEBIT – PWD DISCOUNT EXPENSE 200
CREDIT – SALES P1,000

B . N O N - VAT
DEBIT – CASH P896
DEBIT – PWD DISCOUNT EXPENSE 224
CREDIT – SALES P1,120

###
D E B I T – P E R C E N TA G E TA X D U E P26.88
C R E D I T – TA X PAYA B L E P26.88

5 . 4 T H E S A L E S D I S C O U N T S H A L L B E T R E AT E D A S A N E C E S S A R Y A N D O R D I N A R Y E X P E N S E D U LY
D E D U C T I B L E F R O M T H E G R O S S I N C O M E O F T H E S E L L E R FA L L I N G U N D E R T H E C AT E G O R Y O F
ITEMIZED DEDUCTIONS;

5.5 THE SALES DISCOUNTS SHALL NOT BE ACCOUNTED AS DEDUCTIBLE EXP ENSE FOR
TA X PAY E R S AVA I L I N G T H E O P T I O N A L S TA N D A R D D E D U C T I O N ( O S D ) ;
A . VAT
DEBIT – CASH P800
DEBIT – PWD DISCOUNT EXPENSE 200
CREDIT – SALES P1,000

B . N O N - VAT
DEBIT – CASH P896
DEBIT – PWD DISCOUNT EXPENSE 224
CREDIT – SALES P1,120

###
D E B I T – P E R C E N TA G E TA X D U E P26.88
C R E D I T – TA X PAYA B L E P26.88

5 . 4 T H E S A L E S D I S C O U N T S H A L L B E T R E AT E D A S A N E C E S S A R Y A N D O R D I N A R Y E X P E N S E D U LY
D E D U C T I B L E F R O M T H E G R O S S I N C O M E O F T H E S E L L E R FA L L I N G U N D E R T H E C AT E G O R Y O F
ITEMIZED DEDUCTIONS;

5.5 THE SALES DISCOUNTS SHALL NOT BE ACCOUNTED AS DEDUCTIBLE EXP ENSE FOR
TA X PAY E R S AVA I L I N G T H E O P T I O N A L S TA N D A R D D E D U C T I O N ( O S D ) ;
5 . 6 T H E A M O U N T O F S A L E S D I S C O U N T S H A L L O N LY B E A L L O W E D A S I T E M I Z E D
D E D U C T I O N F R O M G R O S S I N C O M E F O R T H E S A M E TA X A B L E Y E A R T H AT T H E D I S C O U N T
IS GRANTED;

5 . 7 T H E G R O S S S E L L I N G P R I C E A N D T H E S A L E S D I S C O U N T M U S T B E S E PA R AT E LY
I N D I C AT E D I N T H E O F F I C I A L R E C E I P T O R S A L E S I N V O I C E I S S U E D BY T H E E S TA B L I S H M E N T
F O R T H E S A L E O F G O O D S O R S E R V I C E S TO T H E P W D ;

5 . 8 O N LY T H E A C T U A L A M O U N T O F T H E S A L E S D I S C O U N T G R A N T E D O R A S A L E S
D I S C O U N T N OT E XC E E D I N G 2 0 % O F T H E G R O S S S E L L I N G P R I C E O R G R O S S R E C E I P T S C A N
B E D E D U C T E D F R O M T H E G R O S S I N C O M E , N E T O F VA L U E A D D E D TA X , I F A P P L I C A B L E ,
A N D S H A L L B E S U B J E C T TO P R O P E R D O C U M E N TAT I O N U N D E R P E R T I N E N T P R O V I S I O N S
O F T H E TA X C O D E O F 1 9 9 7 M A S
AMENDED; AND

5 . 9 T H E B U S I N E S S E S TA B L I S H M E N T G I V I N G S A L E S D I S C O U N T TO Q U A L I F I E D P W D I S
R E Q U I R E D TO K E E P S E PA R AT E A N D A C C U R AT E R E C O R D S O F S A L E S , W H I C H S H A L L
I N C L U D E T H E N A M E O F T H E P E R S O N W I T H D I S A B I L I T Y, P W D I D N U M B E R , G R O S S
S A L E S / R E C E I P T S , S A L E S D I S C O U N T G R A N T E D, D AT E O F T R A N S A C T I O N S A N D I N V O I C E
N U M B E R F O R E V E R Y S A L E S T R A N S A C T I O N TO P W D .
S E C T I O N 6 . P R O H I B I T I O N O N AVA I L M E N T O F D O U B L E D I S C O U N T S .

T H E FO R EG OING P R I V ILEG ES G R AN TED TO P WD SH AL L N OT BE C L AIM ED I F T H E SAI D P WD

C L A I M S A H I G H E R D I S C O U N T A S M AY B E G R A N T E D B Y T H E C O M M E R C I A L E S T A B L I S H M E N T
A N D / O R U N D E R O T H E R E X I S T I N G L AW S O R I N C O M B I N AT I O N W I T H O T H E R D I S C O U N T
P R O G R A M / S . T H U S , A P W D W H O I S AT T H E S A M E T I M E A S E N I O R C I T I Z E N C A N O N LY C L A I M
O N E 2 0 % D I S C O U N T O N A PA R T I C U L A R S A L E S T R A N S A C T I O N .

S E C T I O N 7 . E X E M P T I O N F R O M VA L U E - A D D E D TA X ( VAT ) O N S A L E O F G O O D S O R S E R V I C E S
T O Q U A L I F I E D P E R S O N S W I T H D I S A B I L I T Y.
7 . 1 S A L E S O F A N Y G O O D S A N D S E R V I C E S U N D E R S E C T I O N S 3 O F T H E S E R E G U L AT I O N S T O
P W D S H A L L B E E X E M P T F R O M T H E VA L U E - A D D E D TA X . T O E N S U R E T H E F U L L E N T I T L E M E N T
O F T H E P E R S O N W I T H D I S A B I L I T Y T O T H E D I S C O U N T P R E S C R I B E D I N T H E A C T, T H E S E L L E R S
A R E P R E C L U D E D F R O M B I L L I N G A N Y VAT T O T H E P W D .

7. 2 T H E SAL E TO A P ERSO N WI T H D I SABILITY M UST FO L LOW T H E I N VO ICI NG R EQUI R EM EN TS

P R E S C R I B E D U N D E R R E V E N U E R E G U L AT I O N S ( R R ) N O . 1 6 - 2 0 0 5 , A S A M E N D E D B Y R R N O S . 2 -
2007 AND 4-2007 AND REVENUE MEMORANDUM ORDER NO. 12 -2013. IF THE SELLER USES A
POINT OF SALE MACHINE, CASH REGISTER MACHINE, E -INVOICING OR OTH ER RECEIPTING
S O F T WA R E / A P P L I C AT I O N I N L I E U O F T H E M A N U A L S A L E S I N V O I C E , T H E M A C H I N E / S Y S T E M
R E C E I P T S / I N V O I C E S M U S T P R O P E R LY S E G R E G AT E T H E E X E M P T S A L E S F R O M T H E TA X A B L E
SAL ES AND MUST FOL LOW THE I NVOICING REQUI REMENTS PRESCRIBED UNDE R REVENUE
R E G U L AT I O N S N O . 1 0 - 2 0 1 5 .
7 . 3 T H E I N P U T TA X AT T R I B U T E TO VAT E X E M P T S A L E I S C O N S I D E R E D A S C O S T O R A N
E X P E N S E A C C O U N T BY B U S I N E S S E S TA B L I S H M E N T S A N D S H A L L N OT B E A L L O W E D A S A N
I N P U T TA X C R E D I T.

7 . 4 I F T H E R E I S N O N A M E O F P W D A N D P W D I D N O . I N D I C AT E D I N T H E R E C O R D S O F
S A L E S , T H E I N P U T TA X AT T R I B U TA B L E TO VAT E X E M P T S A L E C L A I M E D A S A N E X P E N S E
BY B U S I N E S S E S TA B L I S H M E N T S S H A L L B E D I S A L L O W E D .

7 . 5 T H E E X E M P T I O N H E R E I N G R A N T E D W I L L N OT C O V E R OT H E R I N D I R E C T T A X E S T H AT
M AY B E PA S S E D O N BY T H E S E L L E R TO A P W D B U Y E R , S U C H A S P E R C E N TA G E TA X ,
E XC I S E TA X , E T C . I N S U C H A C A S E , T H E D I S C O U N T M U S T B E O N T H E TOT A L C O S T O F T H E
G O O D S O R S E R V I C E S C H A R G E D BY T H E S E L L E R E XC L U S I V E O F T H E VAT.
S E C T I O N 8 . A D D I T I O N A L E X E M P T I O N S O F B E N E FA C T O R S O F Q U A L I F I E D P E R S O N S W I T H
D I S A B I L I T Y.

8 . 1 E F F E C T I V E TA X A B L E Y E A R 2 0 1 6 , A B E N E FA C T O R O F A Q U A L I F I E D P W D , M AY C L A I M T H E
ADDITIONAL EXEMPTION OF TWENTY -FIVE THOUSAND PESOS (P25,000) FOR EACH PWD, IF
S U C H P W D , R E G A R D L E S S O F A G E , S AT I S F I E S A L L O F T H E F O L L O W I N G :

A. FILIPINO CITIZEN;
B . W I T H I N T H E F O U R T H ( 4 TH) C I V I L D E G R E E O F C O N S A N G U I N I T Y O R A F F I N I T Y TO T H E
TA X PAY E R / B E N E FA C TO R ;
C . N O T G A I N F U L LY E M P L O Y E D ; A N D
D . C H I E F LY D E P E N D E N T U P O N A N D L I V I N G W I T H T H E TA X PAY E R / B E N E FA C T O R .

8 . 2 T H E T O TA L N U M B E R O F D E P E N D E N T S ( Q U A L I F I E D D E P E N D E N T C H I L D R E N A N D / O R
Q U A L I F I E D D E P E N D E N T P W D ) F O R W H I C H A D D I T I O N A L E X E M P T I O N S M AY B E C L A I M E D B Y
T H E TA X PAY E R / B E N E FA C TO R S H A L L N O T E X C E E D F O U R ( 4 ) ;

8.3 THE ADDITIONAL EXEMPTIONS FOR QUALIFIED DEPENDENT PWD SHALL BE CLAIMED
O N LY B Y O N E TA X PAY E R O R B Y O N E O F T H E S P O U S E S I N T H E C A S E O F M A R R I E D
INDIVIDUALS;

8 . 4 I N T H E C A S E O F L E G A L LY S E PA R AT E D S P O U S E S , A D D I T I O N A L E X E M P T I O N S M AY B E
C L A I M E D O N LY B Y T H E S P O U S E W H O H A S C U S T O D Y O F T H E C H I L D O R C H I L D R E N O R P W D :
P R O V I D E D , T H AT T H E N U M B E R O F A D D I T I O N A L E X E M P T I O N S T H AT M AY B E C L A I M E D B Y
BOTH SHALL NOT EXCEED THE MAXIMUM ADDITIONAL EXEMPTIONS OF FOUR (4);
8 . 5 T H E TA X PAY E R / B E N E FA C T O R O F T H E P E R S O N S W I T H D I S A B I L I T Y S H A L L S U B M I T T H E F O L L O W I N G
D O C U M E N TA R Y R E Q U I R E M E N T S T O T H E R E V E N U E D I S T R I C T O F F I C E ( R D O ) W H E R E H E I S R E G I S T E R E D
IN ORDER TO CLAIM THE ADDITIONAL EXEMPTION, FOR THE FIRST YEAR O F CLAIMING THE
E X E M P T IO N A N D A F T E R T H R E E ( 3 ) Y EA RS O R U P O N R E N E WA L O F T H E P W D I D W H I C H E V E R CO M ES
F I R S T:

A . D U LY A C C O M P L I S H E D B I R F O R M N O . 2 3 0 5 ;

B . P H O T O C O P Y O F P W D I D E N T I F I C AT I O N C A R D I S S U E D B Y T H E P E R S O N S W I T H D I S A B I L I T Y A F FA I R S
O F F I C E ( P D A O ) O R T H E C I T Y/ M U N I C I PA L S O C I A L W E L FA R E A N D D E V E L O P M E N T O F F I C E ( C / M S W D O )
O F T H E P L A C E W H E R E T H E P E R S O N W I T H D I S A B I L I T Y R E S I D E S O R T H E N AT I O N A L C O U N C I L O N
D I S A B I L I T Y A F FA I R S ( N C D A ) ;

C . S W O R N D E C L A R AT I O N / I D E N T I F I C AT I O N O F Q U A L I F I E D D E P E N D E N T P W D , S U P P O R T A N D
R E L AT I O N S H I P ( A N N E X A ) :

D . B I R T H C E R T I F I C AT E O F P W D ;

E . M E D I C A L C E R T I F I C AT E AT T E S T I N G T O D I S A B I L I T Y I S S U E D B Y I N A C C O R D A N C E W I T H T H E
I M P L E M E N T I N G R U L E S A N D R E G U L AT I O N S O F R . A . 1 0 7 5 4 ; A N D

F. B A R A N G AY C E R T I F I C AT I O N C E R T I F Y I N G T H AT T H E P W D I S L I V I N G W I T H T H E B E N E FA C T O R . 8 . 6 T H E
S U B M I T T E D R E C O R D S O F T H E P W D T O T H E R D O M U S T B E U S E D A S R E F E R E N C E F O R E V E R Y TA X A B L E
Y E A R , I N O R D E R T O V A L I D AT E T H E C L A I M E D A D D I T I O N A L E X E M P T I O N F O R T H E S A M E P W D . S U C H
R E C O R D M U S T B E R E N E W E D B Y TA X PAY E R / B E N E FA C T O R A F T E R T H R E E ( 3 ) Y E A R S O R U P O N
R E N E W A L O F T H E P W D I D W H I C H E V E R C O M E S F I R S T. I N C A S E O F E M P L O Y E E - B E N E FA C T O R , T H E
A F O R E M E N T I O N E D D O C U M E N TA R Y R E Q U I R E M E N T S M U S T B E S U B M I T T E D T O T H E E M P L O Y E R F O R
R E C O R D A N D W I T H H O L D I N G TA X P U R P O S E S .
8 . 7 I L L U S T R AT I O N S .
N O . 1 : I N 2 0 1 6 , M , C PA , I S A W I D O W E R W H O S U P P O R T S T H E F O L L O W I N G D E P E N D E N T S
LIVING WITH HIM:

A – MOTHER O F DEC EASED WI FE, 65 YEARS O L D, UN EMP LOYED;

B – L E G I T I M AT E C H I L D O F D E C E A S E D W I F E W I T H H E R F I R S T H U S B A N D , 2 0 Y E A R S O L D ;
C – L E G I T I M AT E C H I L D , 1 8 Y E A R S O L D ;
D – L E G I T I M AT E N E W B O R N C H I L D ;
E – B R O T H E R , 2 4 Y E A R S O L D , P H Y S I C A L LY D E F E C T I V E , G A I N F U L LY E M P L O Y E D
F – N E P H E W, 2 Y E A R S O L D , W I T H H E A R I N G D I S A B I L I T Y, I L L E G I T I M AT E S O N O F H I S D E C E A S E D
SISTER;
G – S I S T E R , 2 6 Y E A R S O L D , W I D O W, W I T H S P E E C H I M PA I R M E N T, U N E M P L O Y E D ;
H – L E G I T I M AT E D A U G H T E R O F H I S W I D O W E D S I S T E R , 3 Y E A R S O L D ;
I – FO ST ER C H I L D, 5 Y EARS O L D.

I N O C T O B E R 2 0 1 6 , C M A R R I E D A N D G B E C A M E G A I N F U L LY E M P L O Y E D .

W H AT I S M ’ S P E R S O N A L A N D A D D I T I O N A L E X E M P T I O N S F O R T H E Y E A R S 2 0 1 6 A N D 2 0 1 7 ?
2016
BASIC PERSONAL EXEMPTION: P50,000.00
ADDITIONAL EXEMPTIONS:
P 2 5 , 0 0 0 X 4 ( A N Y O F T H E F F : C , D , F, G A N D I ) 1 0 0 , 0 0 0 . 0 0
T O TA L P150,000.00
M M AY C L A I M A D D I T I O N A L E X E M P T I O N S I F H E C A R E S F O R A N D S U P P O R T S A N Y L E G I T I M AT E ,
I L L E G I T I M AT E , O R L E G A L LY A D O P T E D C H I L D , F O S T E R C H I L D O R A P W D ( R E G A R D L E S S O F A G E )
W H O I S W I T H I N T H E 4 T H C I V I L D E G R E E O F C O N S A N G U I N I T Y O R A F F I N I T Y T O M , W H O I S C H I E F LY
D E P E N D E N T U P O N A N D L I V I N G W I T H H I M , A N D N O T G A I N F U L LY E M P L O Y E D .

I F D U R I N G T H E TA X A B L E Y E A R , A N Y O F T H E D E P E N D E N T C H I L D R E N G O T M A R R I E S O R A N Y O F T H E
D E P E N D E N T S B E C A M E E M P L O Y E D , M M AY S T I L L C L A I M T H E A D D I T I O N A L E X E M P T I O N A S I F C G O T
M A R R I E D A N D G B E C A M E G A I N F U L LY E M P L O Y E D AT T H E C L O S E O F S U C H Y E A R 1 .

H I S M OT H E R - IN - LAW A ( A S E N I O R C I T I Z E N W I T H O U T A N Y D I S A B IL I T Y ) , S T E P C H I L D B, B R OT H E R E
AND NIECE H ARE NOT DEPENDENTS OF M FOR PURPOSES OF CLAIMING ADD ITIONAL
EXEMPTIONS.

N O T E : ( 1 ) M H A S F I V E Q U A L I F I E D D E P E N D E N T S ( C , D , F, G A N D I ) B U T C A N O N LY C L A I M A
MAXIMUM OF FOUR QUALIFIED DEPENDENTS.

( 2 ) M C A N C L A I M A N A D D I T I O N A L E X E M P T I O N F O R H I S S T E P C H I L D B , O N L Y I F H E L E G A L LY
ADOPTS HIM.

( 3 ) M C A N N OT C L A I M H I S M OT H E R - IN - L AW A A N D B R OT H E R E , A P W D, A S H I S D E P E N D E N T S
S I N C E H I S M OT H E R - I N - LAW I S A S E N I O R C I T I Z E N 2 W I T H O U T A N Y D I S A B I LI T Y A N D H I S B R OT H E R I S
G A I N F U L LY E M P L O Y E D .

(4) M CANNOT CLAIM H, HIS NIECE, AS HIS ADDITIONAL EXEMPTION.

( 5 ) S I N G L E S TAT U S A L S O A P P L I E S T O T H O S E W H O A R E W I D O W E D ; A N D T H E C I V I L S TAT U S O F
L E G A L LY S E PA R AT E D I S M A R R I E D , F O R TA X AT I O N P U R P O S E S .
2017
BASIC PERSONAL EXEMPTION: P50,000.00
ADDITIONAL EXEMPTIONS:
P25,000 X 3 (D, F AND I) 75,000.00
T O TA L P125,000.00

M CANNOT CLAIM ANYMORE THE ADDITIONAL EXEMPTION FOR HIS LEGITIMATE CHILD C AND HIS
S I S T E R G , W H O G O T M A R R I E D A N D B E C A M E G A I N F U L LY E M P L O Y E D R E S P E C T I V E LY I N 2 0 1 6 .

N O . 2 : X A N D W A R E H U S B A N D A N D W I F E W I T H S I X ( 6 ) M I N O R C H I L D R E N . T H E Y W E R E L E G A L LY
S E PA R AT E D I N 2 0 1 5 , W H E R E T H E C U S T O D Y O F F I V E ( 5 ) C H I L D R E N W E R E A WA R D E D B Y T H E C O U R T
T O X , A N D O N E ( 1 ) C H I L D T O W. W S U P P O R T S H I S B R O T H E R L , W H O I S M U T E , U N M A R R I E D ,
U N E M P L O Y E D A N D L I V I N G W I T H H I M . W H AT I S T H E P E R S O N A L A N D A D D I T I O N A L E X E M P T I O N O F
X AND W IN 2016?

X:
BASIC PERSONAL EXEMPTION: P50,000.00
ADDITIONAL EXEMPTIONS:
P25,000 X 3 (3 CHILDREN) 75,000.00
T O TA L P 125,000.00

W:
BASIC PERSONAL EXEMPTION: P50,000.00
ADDITIONAL EXEMPTIONS:
P25,000 X 1 (1 CHILD) 25,000.00
T O TA L P75,000.00
X I S L E G A L LY S E PA R AT E D S P O U S E W I T H F I V E ( 5 ) Q U A L I F I E D D E P E N D E N T C H I L D R E N I N H I S
C U S T O D Y. W I S A L S O A L E G A L LY S E PA R AT E D S P O U S E W I T H T W O ( 2 ) Q U A L I F I E D D E P E N D E N T S
I N H E R C U S T O D Y, A C H I L D A N D A P W D , W H O I S W I T H I N T H E F O U R T H D E G R E E O F
C O N S A N G U I N I T Y. X C A N C L A I M A D D I T I O N A L E X E M P T I O N S F O R T H R E E ( 3 ) Q U A L I F I E D
DEPENDENT CHILDREN WHILE W CAN CLAIM ADDITIONAL EXEMPTION FOR ON E
( 1 ) Q U A L I F I E D D E P E N D E N T C H I L D . T H E T O TA L A M O U N T O F A D D I T I O N A L E X E M P T I O N S T H AT
M AY B E C L A I M E D B Y B O T H S P O U S E S S H A L L N O T E X C E E D T H E M A X I M U M A L L O W E D O F F O U R
(4) QUALIFIED DEPENDENTS.

N O . 3 : Z , A C PA A N D Y, A N E M P L O Y E E A R E H U S B A N D A N D W I F E W I T H F O U R ( 4 ) M I N O R
CHILDREN. Y SUPPORTS HER 14 -YEAR-OLD BROTHER J, A PWD, LIVING WI TH THEM. Z
CLAIMS THE ADDITIONAL EXEMPTIONS FOR THEIR FOUR (4) CHILDREN. CA N Y CLAIM FOR
A D D I T I O N A L E X E M P T I O N F O R H E R B R O T H E R W H O I S A P W D ? A N S W E R : N O . T H E T O TA L
A M O U N T O F A D D I T I O N A L E X E M P T I O N S T H AT M AY B E C L A I M E D B Y B O T H S P O U S E S S H A L L N O T
EXCEED THE MAXIMUM ALLOWED OF FOUR (4) QUALIFIED DEPENDENTS.

S U P P O S E , Z A N D Y H AV E O N LY T H R E E ( 3 ) Q U A L I F I E D D E P E N D E N T C H I L D R E N , C A N Y
CLAIM FOR ADDITIONAL EXEMPTION FOR HER BROTHER WHO IS A PWD?

A N S W E R : N O . O N LY O N E S P O U S E C A N C L A I M T H E A D D I T I O N A L E X E M P T I O N F O R Q U A L I F I E D
D E P E N D E N T P W D . Z M AY C L A I M T H E A D D I T I O N A L E X E M P T I O N F O R H I S B R O T H E R - I N - L AW J ,
W H O I S R E L AT E D W I T H I N T H E S E C O N D ( 2 N D ) C I V I L D E G R E E O F A F F I N I T Y T O T H E B R O T H E R O F
HIS WIFE.
S E C T I O N 9 . T H E P R I V I L E G E S U N D E R T H E A C T A N D I N T H E S E R E G U L AT I O N S AVA I L A B L E
TO P W D W H O A R E F I L I P I N O C I T I Z E N S M AY O N LY B E G R A N T E D U P O N P R E S E N TAT I O N O F
A N Y O F T H E F O L L O W I N G P R O O F O F H I S / H E R E N T I T L E M E N T T H E R E TO :

9 . 1 A N I D E N T I F I C AT I O N C A R D I S S U E D BY T H E O F F I C E O F P E R S O N S W I T H D I S A B I L I T Y
A F FA I R S ( P D A O ) O R T H E C I T Y/ M U N I C I PA L S O C I A L W E L FA R E A N D D E V E L O P M E N T O F F I C E
(C/MSWDO) OF THE PLACE WHERE THE PWD RESIDES; OR

9 . 2 T H E PA S S P O R T O F T H E P W D C O N C E R N E D W I T H A P PA R E N T D I S A B I L I T Y; O R

9 . 3 A N I D E N T I F I C AT I O N C A R D ( I D ) I S S U E D BY T H E N AT I O N A L C O U N C I L O N D I S A B I L I T Y
A F FA I R S ( N C D A )
S E C T I O N 1 0 . P E N A LT I E S .

1 0 . 1 A N Y V I O L AT I O N O F T H E S E R E G U L AT I O N S S H A L L B E S U B J E C T T O T H E C O R R E S P O N D I N G
P E N A LT I E S U N D E R P E R T I N E N T P R O V I S I O N S O F T H E TA X C O D E O F 1 9 9 7 , A S A M E N D E D , A N D
O T H E R A P P L I C A B L E R E G U L AT I O N S I S S U E D B Y T H E B I R ;

1 0 . 2 F U R T H E R , A N Y P E R S O N W H O V I O L AT E S A N Y P R O V I S I O N O F R . A . 1 0 7 5 4 S H A L L S U F F E R
T H E F O L L O W I N G P E N A LT I E S :

1 0 . 2 . 1 F O R T H E F I R S T V I O L AT I O N O F A N Y P R O V I S I O N O F T H E A C T A N D T H E S E R E G U L AT I O N S ,
A FINE OF NOT LESS THAN FIFTY THOUSAND PESOS (P50,000) BUT NOT E XCEEDING
O N E H U N D R E D T H O U SA N D P ES O S ( P 1 0 0 , 0 0 0 ) O R I M P R I S O N ME N T O F N OT L ESS T H A N S I X
M O N T H S B U T N O T M O R E T H A N T W O Y E A R S , O R B O T H AT T H E D I S C R E T I O N O F T H E C O U R T;

1 0 . 2 . 2 F O R A N Y S U B S E Q U E N T V I O L AT I O N T H E R E T O , A F I N E O F N O T L E S S T H A N O N E
HUNDRED THOUSAND PESOS (P100,000) BUT NOT EXCEEDING TWO HUNDRED THOUSAND
PESOS (P200,000) OR IMPRISONMENT FOR NOT LESS THAN TWO YEARS BUT NOT MORE
THAN
S I X Y E A R S , O R B O T H AT T H E D I S C R E T I O N O F T H E C O U R T.
10.2.3 ANY PERSON WHO ABUSES THE PRIVILEGES GRANTED UNDER THE LA W SHALL BE
PUNISHED WITH IMPRISONMENT OF NOT LESS THAN SIX MONTHS OR A FINE OF NOT LESS
THAN FIVE THOUSAND PESOS (P5,000), BUT NOT MORE THAN FIFTY THOUS AND PESOS
( P 5 0 , 0 0 0 ) , O R B O T H , AT T H E D I S C R E T I O N O F T H E C O U R T.

I F T H E V I O L AT O R I S A C O R P O R AT I O N , O R G A N I Z AT I O N O R A N Y S I M I L A R E N T I T Y, T H E
O F F I C I A L S T H E R E O F D I R E C T LY I N V O LV E D S H A L L B E L I A B L E T H E R E F O R .
I F T H E V I O L AT O R I S A N A L I E N O R A F O R E I G N E R , H E S H A L L B E D E P O R T E D I M M E D I AT E LY
A F T E R S E R V I C E O F S E N T E N C E W I T H O U T F U R T H E R D E P O R TAT I O N P R O C E E D I N G S .

U P O N F I L I N G O F A N A P P R O P R I AT E C O M P L A I N T, A N D A F T E R D U E N O T I C E A N D H E A R I N G , T H E
P R O P E R A U T H O R I T I E S M AY A L S O C A U S E T H E C A N C E L L AT I O N O R R E V O C AT I O N O F T H E
B U S I N E S S P E R M I T, P E R M I T T O O P E R AT E , F R A N C H I S E A N D O T H E R S I M I L A R P R I V I L E G E S
G R A N T E D T O A N Y B U S I N E S S E N T I T Y T H AT FA I L S T O A B I D E B Y T H E P R O V I S I O N S O F T H E A C T
A N D T H E S E R E G U L AT I O N S .
S E C T I O N 1 1 . S E PA R A B I L I T Y C L A U S E
I F A N Y P O R T I O N O R P R O V I S I O N S O F T H E S E R E G U L AT I O N S I S D E C L A R E D U N L AW F U L , T H E
R E M A I N D E R O F T H E S E R E G U L AT I O N S O R A N Y P R O V I S I O N S N OT A F F E C T E D T H E R E BY
S H A L L R E M A I N I N F O R C E A N D E F F E C T.

SECTION 12. REPEALING CLAUSE

A L L R E V E N U E R E G U L AT I O N S A N D OT H E R R E V E N U E I S S U A N C E S O R PA R T S T H E R E O F
I N C O N S I S T E N T W I T H T H E P R O V I S I O N S O F T H E S E R E G U L AT I O N S A R E H E R E BY R E P E A L E D
O R M O D I F I E D A C C O R D I N G LY.

SECTION 13. EFFECTIVITY

T H E S E R E G U L AT I O N S S H A L L TA K E E F F E C T F I F T E E N ( 1 5 D AY S ) A F T E R P U B L I C AT I O N I N
T H E O F F I C I A L G A Z E T T E O R I N A N Y T W O N E W S PA P E R S O F G E N E R A L C I R C U L A T I O N ,
WHICHEVER COMES EARLIER.

SOURCES:

W W W. N C D A . G O V. P H / D I S A B I L I T Y - L AW S

H T T P S : / / W W W. B I R . G O V. P H / I N D E X . P H P/ R E V E N U E - I S S U A N C E S / R E V E N U E - R E G U L AT I O N S / 2 0 1 7 -
R E V E N U E - R E G U L AT I O N S . H T M L