[silent_investor]

Does anyone have an experience with TCCs (Tax Credit Certificates). This is the way that future PERA investors will receive their 5% tax break.

[joshlegaspi]

kelan kaya ito ma-implement?

Anyway, based on the FAQ page on BPI's website, i've noted that it mentions there that the employer can contribute in behalf of its employee.  But what strikes me most is that it mentions that the contribution of the employer will not be subject to withholding tax. 

If this is the case, then i can suggest sa employer ko na instead na ako ang mag contribute, sila na ang magcontribute diretso sa PERA fund ko - deducted from my salary - in that way, the 100K part of my annual salary will not be subjected to WHT TAX.  This would be better kaysa ako mismo yung mag contribute kasi all i'll get is just a P5,000 tax rebate (if ako ang magcontribute) vs about 30,000 tax shield i can get (about 30% WHT of P100K contribute) if it would be my employer who will contribute in my behalf.

Is my understanding correct??? here's the link to BPI's FAQ on PERA.

https://www.bpiassetmanagement.com/upload/files/products%20and%20services/PERA%20FAQs%20032212.pdf

[silent_investor]

@ Josh

Looks possible... I'm just wary that the BIR might not allow a 100% contribution that comes from the company on an employee's PERA account. But knowing how creative company accountants can be, I'm sure there is a way to do this! Nice insight!

[nanashi]

http://www.pse.com.ph/resource/memos/2012/TPA_2012-0180.pdf

The concern government agency is now accepting PERA administration Accreditation as we speak. It's a matter of time that PERA will be implemented by next year. Something to look forward to

[CrimsonSky]

According to the BPI Faqs, PERA contributions isn't limited to cash, it can be in the form of securities.
Question, are participation in MF/UITF considered as securities? Given that my investments in those instruments are mostly for retirement, I would probably place those under PERA assets.

[freefront]

^there's something tickling my mind about the existing MF accounts. If the regulations are in and the MF companies would start participating next year, would you bother redeeming your shares and put them back in next yr.? Assuming there will be no sales load to think about (malay mo, tapos na yung restrictions sa back-end sales load mo) and the stock market performance is the wild card.

Wait. uugghhhh! I have to answer my own question. Pag mauubos yung 100K na allotment mo for the tax credit incentive, malamang, huwag na. Pero pag hindi pa naman, would you do the above? <<<assuming may loophole ka na puedeng pasukin sa move na ganyan.

[kithe]

Kung may MF accounts na kayo, and satisfied kayo sa return, leave them na lang to grow or add investment until you reach your desired retirement age..

And if you want, open a PERA account if you gusto niyo..

Para sa akin, same principle din, to accumulate funds for your retirement.. yung isa personal initiation and the other mandated by govt.

Pero para sa akin, okay na yung personal account as of the moment..

[vicces]

^nice. ipon mode ON.

[freefront]

Kung may MF accounts na kayo, and satisfied kayo sa return, leave them na lang to grow or add investment until you reach your desired retirement age..

And if you want, open a PERA account if you gusto niyo..

Para sa akin, same principle din, to accumulate funds for your retirement.. yung isa personal initiation and the other mandated by govt.

Pero para sa akin, okay na yung personal account as of the moment..

@kithe- the tax incentive! Nakakita kaya ako ng payslip ng isang professor sa Baguio. Around 35K ang gross, nasa 15% bracket ang tax deductions nya. It is an additional sweetener to entice people to make more effort para sa personal retirement fund, di ba?

[CrimsonSky]

Yep, tax incentive habol ko. A) though hindi ganun kalaki, 100k that goes to your PERA assets, 5k tax credit. Kung may witholding tax ka with your employer, I think you can present it to them para may tax refund ka from your employer. B) If rekta from employer to admin ang PERA contributions = lower taxable income

^there's something tickling my mind about the existing MF accounts. If the regulations are in and the MF companies would start participating next year, would you bother redeeming your shares and put them back in next yr.? Assuming there will be no sales load to think about (malay mo, tapos na yung restrictions sa back-end sales load mo) and the stock market performance is the wild card.

Wait. uugghhhh! I have to answer my own question. Pag mauubos yung 100K na allotment mo for the tax credit incentive, malamang, huwag na. Pero pag hindi pa naman, would you do the above? <<<assuming may loophole ka na puedeng pasukin sa move na ganyan.

Yun din iniisip ko, unless magkaroon ng contribution si employer, I don't think ma-maximize ko ang 100k. and for the redemption of shares, I was thinking of transferring the shares, rekta na, hindi ko na sya i-redeem.

[kithe]

Here is the details of the incentives..

a.) Tax credit—the contributor shall be entitled to a 5-percent tax credit of his annual contribution. The maximum annual contribution is P100,000 per person or P200,000  for married couples.
This basic tax incentive is a tax credit system or deduction from income tax payable to the government, not merely a tax deduction from the gross income of the contributor.

To illustrate, if a married couple has P100,000 income tax payable for a given year and has put aside P200,000 in PERA, they can deduct  P10,000 (5 percent of P200,000) from their income tax, thereby paying the government only P90,000 for that year.
Note that in case of overseas Filipinos, the annual cap is P200,000 per individual and P400,000 per couple. The law doubled the annual cap for overseas Filipinos to help substantially increase their inward remittances into the country.

b.) Employer contribution—a private employer may contribute to its employees’ PERA to the extent of the maximum amount allowable to the contributor. The contributions shall be allowed as a deduction from the employer’s gross income for income tax purposes.
More importantly, the employer’s contribution shall not form part of the employee’s taxable income; hence, it is exempt from the withholding tax on income, whether withholding tax on compensation or fringe benefits.

c.) Tax-exempt investment income—all income earned from PERA investments is tax exempt. For example, they are exempt from the (a) 20 percent final withholding tax from interest on bank deposits or deposit substitutes; (b) capital gains tax; (c) 10 percent dividend tax; and (d) regular income tax.

Again, to illustrate, if a contributor used his PERA savings to buy shares of stock of Philippine Long Distance Telephone Co. or the Ayala or SM group of companies and receives dividends from such investments, his dividends shall be exempt from the 10-percent dividend tax prescribed by the National Internal Revenue Code.

d.) Tax-free distributions—all distributions of PERA assets, which include the annual contributions and their income, upon retirement of the contributor and provided he has made PERA contributions for at least five years, are tax-exempt. Distributions to the heirs of the contributor upon his death are exempt from estate tax.

e.) Nontax incentives—PERA assets are exempt from attachment, garnishment, and levy on execution. Neither can they be alienated nor pledged or encumbered. PERA assets are not considered part of the contributor’s assets for purposes of insolvency. In short, all PERA assets are beyond the reach of the creditors of the contributor.

[CrimsonSky]

a.) Tax credit—the contributor shall be entitled to a 5-percent tax credit of his annual contribution. The maximum annual contribution is P100,000 per person or P200,000  for married couples.
This basic tax incentive is a tax credit system or deduction from income tax payable to the government, not merely a tax deduction from the gross income of the contributor.

Example, PERA contri = 100k; and if the tax withheld by my employer for the year is at 30k, before they report/remit it to the BIR, I must give them a certification of tax credit of 5k. My employer will give me a tax refund of 5k, and submit my ITR with the certification to the BIR and remit only 25k.

Tama ba pagkaka-intindi ko?

[nanashi]

Not entirely correct.. The maxmum Php 5000 tax credit is exemption to your gross income.

For Example and i'm just making up this numbers for ease of understanding

You earn 10K a month and for a year your expected gross income is 130K (including 13th month)

Your 130K would determined your tax bracket of how much you would pay for your taxes. There are deduction to your 130K such as personal exemption, dependents etc.. this where your PERA tax credit will go.

130K - 50K (personal exemption if single) - 5K (PERA Tax credit) = 75K , this will be subject for taxes and for example tax bracket for earners of 75K and below is 15% thus your 75K net taxable income would be P11.25K (75K x 15% = 11.25K). So It's not your 11.25K would be reduced by your 5K PERA tax credit but your gross income for taxation, Don't expect 11.25K - 5K = 6.25K tax payable would occur.

[CrimsonSky]

With that, isn't it a tax deduction then, not a deduction to income tax payable to the gov't?

Ang example ng "tax deduction from the gross income" ay SSS, PhilHealth, Pag-IBIG, personal exemptions, dependents, etc. diba?
Then ang "income tax payable", from the word payable, yung utang mong tax, which is the withholding tax that your employer should remit.

I'm talking about the 5% tax credit, not the employer contribution... Tama ba pagkaka-intindi ko?

Nalilito na ako! Dapat na ipatupad yan para malinaw na lahat! Hahaha!

[freefront]

Here is the details of the incentives..

a.) Tax credit—the contributor shall be entitled to a 5-percent tax credit of his annual contribution. The maximum annual contribution is P100,000 per person or P200,000  for married couples.
This basic tax incentive is a tax credit system or deduction from income tax payable to the government, not merely a tax deduction from the gross income of the contributor.

To illustrate, if a married couple has P100,000 income tax payable for a given year and has put aside P200,000 in PERA, they can deduct  P10,000 (5 percent of P200,000) from their income tax, thereby paying the government only P90,000 for that year.
Note that in case of overseas Filipinos, the annual cap is P200,000 per individual and P400,000 per couple. The law doubled the annual cap for overseas Filipinos to help substantially increase their inward remittances into the country.

^this and nanashi's post don't agree...

b.) Employer contribution—a private employer may contribute to its employees’ PERA to the extent of the maximum amount allowable to the contributor. The contributions shall be allowed as a deduction from the employer’s gross income for income tax purposes.
More importantly, the employer’s contribution shall not form part of the employee’s taxable income; hence, it is exempt from the withholding tax on income, whether withholding tax on compensation or fringe benefits.

^on both SSS and PERA? Parang ang laki naman yata ang mawawala sa tax collection ng gobyerno.. Isa pa, walang cap sa percentage ng suweldo ng employee sa puede nyang i-contribute? Parang papuntang, If you are earning 300K p.a., and your 100K allowable contribution is maxed out, isama mo yung iba pang deductibles mo, at mukhang very improbable na yung natitira ay kayang tustusan ang pamilya, hindi magtataka ang BIR kung saan galing yung ginagamit mo as cost of living? Na may iba ka pang source of income, halimbawa. O, may nakikisakay sa PERA account mo?

c.) Tax-exempt investment income—all income earned from PERA investments is tax exempt. For example, they are exempt from the (a) 20 percent final withholding tax from interest on bank deposits or deposit substitutes; (b) capital gains tax; (c) 10 percent dividend tax; and (d) regular income tax.

Again, to illustrate, if a contributor used his PERA savings to buy shares of stock of Philippine Long Distance Telephone Co. or the Ayala or SM group of companies and receives dividends from such investments, his dividends shall be exempt from the 10-percent dividend tax prescribed by the National Internal Revenue Code.

^mukhang lalabas sa bangko ang madaming kuarta at pupunta sa PERA 

d.) Tax-free distributions—all distributions of PERA assets, which include the annual contributions and their income, upon retirement of the contributor and provided he has made PERA contributions for at least five years, are tax-exempt. Distributions to the heirs of the contributor upon his death are exempt from estate tax.

^Retirement is mentioned. May age limit?

e.) Nontax incentives—PERA assets are exempt from attachment, garnishment, and levy on execution. Neither can they be alienated nor pledged or encumbered. PERA assets are not considered part of the contributor’s assets for purposes of insolvency. In short, all PERA assets are beyond the reach of the creditors of the contributor.

^Ewan lang. May makakagulo nyan. Tayo pa! 

Yun din iniisip ko, unless magkaroon ng contribution si employer, I don't think ma-maximize ko ang 100k. and for the redemption of shares, I was thinking of transferring the shares, rekta na, hindi ko na sya i-redeem.

^walang rule sa mga existing funds na sa investment accounts? at tsaka sa new contributions? Para kasing kung wala ka namang nakahanda for the PERA account, e di ilabas mo muna yung nasa existing MF account mo. Tapos ipasok ulit pero sa PERA na, para lang makuha mo yung tax incentive. Kasi naman, parang kailangan mo pang mag-realign ng strategy mo.