These are some of the important highlights to take note of regarding PERA:
a) A Contributor may create and maintain a maximum of five (5) PERAs at any one time. However, each PERA shall be confined to only one category of PERA Investment Product. Thus, a Contributor can have five (5) PERAs and five (5) categories of PERA Investment Products;
b) An employee or self-employed qualified Contributor shall be entitled to a five percent (5%) tax credit of the aggregate qualified PERA contributions made in a calendar year which shall be allowed to be credited only against their income tax liabilities.
An Overseas Filipino Contributor with taxable income in the Philippines shall be entitled to a five percent (5%) tax credit to be claimed against any internal revenue tax liabilities, excluding his/her withholding tax liabilities as a withholding agent. However, Overseas Filipino Contributor without taxable income in the Philippines shall also be entitled to a five percent (5%) tax credit but will eventually be forfeited in favor of the government.
c) Tax credits arising from PERA contributions can be used as payment for delinquent accounts but in no case be refundable or convertible into cash or transferrable to any other party.
d) A qualified employer’s contribution to the employee’s PERA shall not be entitled to 5% tax credit but can be claimed as a deduction from its gross income, but only to the extent of its contribution that would complete the maximum allowable PERA contribution under Rule 8 of the Rules and Regulations Implementing the PERA Act of 2008. The qualified contribution shall likewise be exempt from withholding tax on compensation and final withholding tax on fringe benefits;
e) The concerned RDOs/Offices shall issue the Certification of Entitlement to 5% Tax Credit for Employee-Contributor (BIR Form No. 2339) of his/her qualified PERA contributions for release to the PERA Administrator which/who will in turn transmit such certificate to the employer for purposes of automatically adjusting the withholding tax on employee’s compensation income; or PERA Tax Credit Certificate (TCC) to be issued in the name of the qualified Overseas Filipino or self-employed Contributor for release to the PERA Administrator which/ who shall in turn give to the PERA Contributor the said TCC (BIR Form 2337)
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