‘ApS, 2006 BIR RULING GES BIR Rling No. 268-93 & DA145.00 Mr, Homer 4 Dacuscus 66772-B Adalla Street, Gundalpe Viejo ‘Makati City sir “This refers to your leter dated October 24, 2005 requesting fra ruling on whether or not "love gis given to pastors are subject to withhoing tax. [As represented, you are an accountant by profession You are presently employed with ove of the companies in Makati City a8 Internal Autor. One of your officers feferted you to # Christian church, which was looking for «parttime accountant. You applied and was able fo close the deal. When you started working for the [oreaid church, you found out thatthe compensation tat the pastors receive which they cal “lve-gif isnot beng subjected to withholding tax. When asked aboot the eason why wihbolding was Hot observed, the former accountant expand hat: 1 the pastor’ service is forthe ministry of God and not fr profit, 2) the compensation they {eceive is nol salary bt love gift 3) the church itself isa non-profit orgaszation, therefore, nol tnabe; and 4) the “love they receive come from the lve offerings, tithes and donations forthe church Despite the aforementioned reasons, you still cided to subject the pastors’ compensation to witholdng fx onthe following grounds 1) the compensation is repulary given during the 15th and end ofthe month, despite the fact tha his clle love pif 2) the amount being received by the pastors i fixed asin basic salaries given to employees, 3) the compensation is being subjected to SSS, Philbealth and Pagsbig conebutions, 4 13th month pay is given othe pastors and is ‘Computed based on ther love gift 5) the compenstionIove-if rage from PAP10,000 to 20,000, and 6) the Head Pastor bas contro oer the activities of hs pastors and ‘be can dicate the amount of compensation tbe given to them, therefore, an employer employe relationship exists tn reply, please be informed tat Section 278.3 of Revenue Regulations (Rev. Regs) No. 298, as amended, provides for the legal parameters in determining the existence of employeremplovee relationship, 2 fellows “te grralthereloasip ofthe employer and euployee exits when te pesca for whom eves were pefomed has the sight to cot ad tect the nd who patos te sence, not ena tothe tea to be accompli by te wok bt aso as othe des and meas by which he resis accomplished An employees abet 0 {Geel and couol ofthe ployer nto 10 what hl be dove, but owt sl be done lis connection is ot ecessary ha the employer actualy det of conte tanner wich be series ce pero. ts sli athe as thigh to do 0‘The night to dismiss an employee is also an important factor inckicating thatthe person possessing that sight is an employer. Other factors or characteristics of an employer, ‘wich may nt be essary preset in every cas, ae fing the ol a rich of lac Yo work, othe nit who performs the services. In goer. an inal is fo comaered an employee hes subject 1 the ctl odin fae ey a oe reno be accompa bythe wok, ad ot so te mens snd methods fr comping there ‘The messuemen tod or desgnson of compensations sho mt heen of rly aad chy in fact exits (onthe other hand, Section 278 4 of Rev Reps. 2-98, as amended defines employe" to me, ve * ay parson for whom a nia proms ox performed ny see, of wines mt, under aa cploye employee seb, I not necessary th the services be contig a the tine the wages ae pai inode tht he ste of employer my ext Tas, fr purposes af wing, a person for whom an iil has efmed past services and om whom he ssi ein compen i ample” 1 BK Rig No 26995 dated 8,1993 hss of es an ms ho wedi prs in ost (.e,celeraton of miss al nent, spit ue to pnt, Nesung for he Seat) wee claned ar dion nd conbon by be hoa apomcatsince wera 10 the m0 Carle ployer existed tween tehsil an he pss Tis Oe edn he sfremeoned cae at tery fr of congestion fr pron eve sul reps oho ts xed who pti whichis esate he ss pos wich its ein oe oy bch Wis ceed (Miche, Fecal Tax Hunook p13)" Acid he sls of pi an soho We Se pro eres ne orp were feos Conpnstion nome bet mong ta 1n view of the foregoing, i isthe opinion ofthis Office thatthe personal income (veg) derive by the pastors from their pastoral ministry is compensation income sabjec to income tx and withholding under Section 2 79 of Rev. Regs No. 2.98 as amended Moreover, tax exemptions are held strictly apuins the taxpayer, and if not expressly mentioned in the law must be within its purview by clear legislative intent (Commsioner of Customs vs: Phlppine ceylene Co, In, 39 SCRA 70) Exemptions from tation ae highly disfverd in av and he who clans an exemption mut be ale to justi his claim by the clearest pant of organic or statute lav_An exemption rom the common burden cot be perited to exist upon wage inpictios (site Petroiewn co, vs. Llamas, 49 Pil 466, Davao Light and Power Co, Inc. vs. Commissioner of Customs, L-28731, 28902, Masch29. 1972) This ruin is being issbed on the basis ofthe forepoing facts a represented. 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