INCOME TAXATION- CHAPTER 13-A ADDITIONAL CLAIMABLE COMPENSATION EXPENSE

Income Taxation

1. ADDITIONAL CLAIMABLE COMPENSATION EXPENSE FOR PERSONS WITH DISABILITY Requisites for deductibility A. The entity present proof as certified by the department of labor and employment (DOLE) that disabled persons are under their employ. B . The disabled employee is accredited with the Department of Labor and employment (DOLE) and the Department of Health (DOH) as to his disability, skills, and qualifications. Private entities that employ disabled persons shall be entitled to an additional deduction, from gross income, equivalent to 25% of the total amount paid as salaries and wages to disabled persons. COST OF FACILITIES IMPROVEMENT FOR DISABLED PERSONS Under RA7277 also known and cited as Magna Carta for disabled persons, private entities that improve or Modify their physical facilities in order to provide reasonable accommodation for disabled persons shall also be entitled to an additional deduction from their income equivalent to fifty percent (50%) direct costs of the Improvements or modifications Section 4-B, incentives for employee.

2. ADDITIONAL TRAINING EXPENSE UNDER THE JEWERLY INDUSTRY DEVELOPMENT ACT OF 1998 Under RA 8502 and its implementing rules and regulations, a qualified jewelry enterprise duly registered, and accredited with the Board of Investment (BOI) is entitled to an additional deduction from taxable Income of 50% of the expenses incurred in training schemes approved by technical Education and Skills Authority (TESDA) . The same shall be deductible the year the expenses were incurred. Conditions for deductibility 1 . A qualified jewelry enterprise must submit to the BIR a certified true copy of its certificate of Accreditation Issued by BOI. 2. The training schemes must be approved and certified by TESDA. ADDITIONAL LABOR TRAINING EXPENSE UNDER THE CREATE LAW Under RA 11534, 50% of the value of labor training expenses incurred for skills development of enterprise Based trainees enrolled in publics senior high schools, public higher educations institutions, or public higher education institutions, or public technical and vocational institutions shall be claimed as additional deductions against gross income.

3. Conditions of deductibility: ILLUSTRATION Texas instrument (TI) established an apprenticeship program in training private and public school senior high students. The program was duly accredited by TESDA .During the year TI incurred a total of 1 ,800,000 apprentice training expenses on top of following payroll expenses . Factory Personnel pay roll P 8,000,000 Support department personal payroll 500,000 Administrative personal payroll 1,500,000 Total P 10,000,000 The additional deduction shall be computed as follows: Apprenticeship training expense P 1,800,000 Multiply by: Incentive percentage 50% Possible deduction P 900,000 Deduction limit (8M direct labor × 10% ) P 800,000 The deductible amount shall be the lower 800,000 . T he same shall be classified under special allowable deduction. The 1 ,800,000 training expenses shall be claimable under regular allowable deduction. 1.Apprenticeship agreement between the enterprise (taxpayer) and the trainees pursuant to the labor code of the Philippines. 2. Certification from DepEd, TESDA, or CHED secured by the enterprise.