SPECIAL ALLOWABLE ITEMIZED DEDUCTIONS 4.

DISCOUNTS
A. Special Deductions under NIRC and Special To Senior Citizens & PWDs
Laws
B. Deduction Incentives under Special Laws 20% - Senior Citizens (goods & services)

SPECIAL DEDUCTIONS UNDER NIRC & SPECIAL 5% - Senior Citizens (water & electricity)
LAWS
50% - if a business provides water or electricity
1. INCOME DISTRIBUTION to Senior Citizen Centers (SC Centers mismo
From Taxable Estate & Trust ata?)

Estate = pool of properties 20% - PWDs

Trust = arrangement between persons wherein
the third person will manage the properties EXAMPLE:

Heirs = receive income generated by the Estate

Beneficiary = receive income generated by Trust

Estate / Trust
Income distributed to
heirs/beneficiary = Deductible Expense

Heirs / Beneficiary
Income received = Taxable Income

*** Fast Food:

2. TRANSFERS TO RESERVE FUNDS 2 Persons (1 Senior & 1 Non-Senior)
Of Taxable Cooperatives • Higher Valued Meal will be subjected to
Discount
Income
Less: Expenses Group Meal (More than 2 with 1 Senior)
----------------------- • Meal of Senior / PWD will only be subjected
Net Surplus to Discount

Net Surplus will be designated to:

• 3% - Community Development Fund
• 7% - Optional Fund
• 10% - Training & Education Fund
• 10% - Reserve Funds (Deductible Exp.)

*** these percentages are minimum

3. DIVIDEND DISTRIBUTION
Of Real Estate Investment Trust (REIT)

*** same concept with Income Distribution from

Taxable Estate & Trust
 DEDUCTION INCENTIVES UNDER SPECIAL CASH
LAWS - Actual Amount

1. ADDITIONAL COMPENSATION EXPENSE PERSONAL PROPERTY

For Senior Citizens & PWD Employees - Acquisition Cost
- Depreciated Value
15% - Senior Citizen (RR 7 – 2010)
25% - PWD (RR 1 – 2009) REAL PROPERTY
- Fair Market Value
- Book Value **whichever is lower

CONSUMABLE GOODS
- Acquisition Cost
- Actual Cost @ Time of Donation/Contribution

SERVICES
Requirements for Senior Citizen: - Value
• Continuously works for 6 months
• Within Poverty Level (stated by NEDA)
5. COMPLIANCE TO ROOMING-IN &
Requirements for PWD: BREASTFEEDING PRACTICES
• Business must have Certification by DOLE RA 10028
• PWD employees must be Accredited by
DOLE & DOH 100% of Cost
Additional Special Deduction

2. FACILITY IMPROVEMENTS
For PWDs 6. FREE LEGAL ASSISTANCE
RA 9442, RR 1 – 2009 RA 9999

50% of Direct Cost Lawyers are mandated to render 60 Hours of

Additional Special Deduction Free Legal Assistance (Every Year)

ProBono Services, which exceeds that 60 hours

3. JIDA (Jewelry Industry Development Act) 10% of Gross Income (Limit)
Training Expense approved by TESDA **whichever is lower
RA 8502 accredited by BOI

50% of Training Expense 7. PRODUCTIVITY INCENTIVE BONUS

Additional Special Deduction RA 6971

50% of Productivity Incentive Bonus

4. ADOPT A SCHOOL PROGRAM Additional Special Deduction
Donation / Contributions to public schools
RA 8525, RR 10 – 2003
8. PHILIPPINE GREEN JOB ACT OF 2016
Fully Deductible RA 10771
• Priority Program of Government (Education)
• Accredited NGOs within the Priority 50% of Training & RND Expenses
Program Additional Special Deduction

50% of Donation / Contribution

Additional Special Deduction
9. SPECIAL DEDUCTIONS ALLOWED UNDER
BAYANIHAN TO HEAL AS ONE (RA 11469) &
BAYANIHAN TO RECOVER AS ONE LAW (RA
11494)

10. LABOR TRAINING EXPENSES

CREATE Law

50% of Labor Training Expenses

Additional Special Deduction

additional 50% of the value of labor training

expenses incurred for skills development of
enterprise-based trainees enrolled in public
senior high schools, public higher education, or
public technical vocational institutions and duly
covered by an apprenticeship agreement under
the Labor Code of the Philippines. Provided that
the enterprise shall secure proper.
OPTIONAL STANDARD DEDUCTION (OSD)
- In lieu of Regular & Special Allowable Itemized
Deductions

PERSONS COVERED:
1. INDIVIDUALS
• Resident Citizens
• Non-Resident Citizens
• Resident Aliens

2. CORPORATIONS
• Domestic Corporations
• Resident Foreign Corporations