Country: Philippines
Compliance category: Tax Exemption Limit Change
Regulatory Information:
Regulation: Tax Code, 1997
Notification/Circular No: Revenue Regulations No. 4-2025
Notification date: January 30, 2025
Updates in Compliance:
Summary:
In accordance with Revenue Regulation No. 4-2025, the exemption limits for de minimis benefits have been further revised. This amendment includes an increase in the exempt clothing/uniform allowance and expands the definition of de minimis benefits to include cash and gift certificates as part of employee achievement awards.
Effective Date: February 14, 2025
Overview of changes to De-minimis Benefits limit:
| Particulars | Existing | Revised |
| Uniform/Clothing Allowance | 6,000 | 7,000 |
| Employee Achievement Awards | Exclude cash or gift certificate | Include cash or gift certificate |
Our Analysis:
The update in RR 04-2025 represents a proactive step toward enhancing employee welfare while promoting compliance and economic growth. By expanding the scope of de minimis benefits and increasing allowances, the regulation not only supports employees but also positions businesses favorably in a competitive landscape, ultimately contributing to a healthier economy in the Philippines.
The overall increase in non-taxable benefits may lead to higher disposable income for employees, potentially boosting consumer spending. As employees have more financial resources due to these benefits, it could stimulate local economies and contribute positively to economic growth.
