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Revenue Memorandum Circular · RMC

RMC No. 4-2023

To clarify the base amount for the imposition of the twenty percent (20%) penalty relative to the early withdrawal of Personal Equity and Retirement Account (PERA) for assets, accounts and sub-accounts classified as unqualified.

Bureau of Internal RevenueIndependent research copy
Document type
RMC
Number
4
Year
2023
Text quality
Not specified

Document text

Reference copy · verify against the official source
RMC No. 4-2023 clarifies the base amount for the 20% penalty on early withdrawal of PERA assets, accounts and sub-accounts classified as unqualified. Citing Section 10(C) of RR No. 17-2011, it states that the early withdrawal penalty consists of 20% of the gross income earned by the PERA for the entire duration plus the 5% tax credit availed, and applies to withdrawals not within the circumstances enumerated under Section 10(B). Losses on PERA sub-accounts may not be deducted from the gross income earned. An unqualified withdrawal of a sub-account results in automatic termination of all other sub-accounts, and the Circular provides an illustration of the computation. The PERA Administrator must compute and withhold the penalty from the contributor's proceeds and report and remit it to the BIR under RR No. 2-2022 and RMC No. 45-2022.