RR 13-2022

RR No. 13-2022 (issued October 7, 2022) prescribes guidelines, procedures and requirements for the income tax treatment of equity-based compensation of any kind. Citing Section 32(A) of the NIRC of 1997 and Section 2.78.1 of RR No. 2-98, it states that equity grants under an employer's equity schemes give rise to a realized benefit because they are awarded for services rendered; once exercised or availed of by grantee-employees, the grants are treated as compensation taxable under Section 32 of the NIRC as implemented by RR No. 2-98. Compensation paid in kind, such as stock, is included at the fair market value of the property received, and if a corporation transfers its own stock, the remuneration is the fair market value of the stock at the time the services were rendered. The rule applies regardless of whether the grantee-employee is rank-and-file or holds a supervisory or managerial position.