Revenue Regulations (RR) No. 7-2010
dated July 20, 2010

The Bureau of Internal Revenue has issued the Implementing Rules and Regulations for Republic Act 9994, otherwise known as the "Expanded Senior Citizens Act of 2010". The salient features of the new rules include the following:

1. All establishments, supplying the goods and services as specified under the Act to senior citizens, for their exclusive use and enjoyment or availment, shall give a discount of twenty (20%) percent.

2. The grant of the discount is only for the purchase of goods and services enumerated in the Act for THE EXCLUSIVE USE AND ENJOYMENT OR AVAILMENT OF THE SENIOR CITIZEN.

3. The establishments supplying the specified goods anf services may claim the discounts granted as a tax deduction based on the cost of the goods sold or services rendered to senior citizens. The  discounts granted shall be treated as ordinary and necessary expenses deductible from the gross income of the seller falling under the category of itemized deductions, and can only be claimed if the seller does not opt for the Optional Standard Deduction during the taxable quarter/year.

4. The selling price to be charged by the seller must be net of VAT because the sale to senior citizens is exempt from VAT. The sellers are precluded from billing any VAT to the Senior Citizen.

5. The exemption of senior citizens from income tax granted in the Act will not extend to all types of income earned during the taxable year, such as withholding taxes on interest income, capital gains tax, etc.

The implementing rules take effect on August 5, 2010, which is fifteen days after its publication in the Manila Bulletin on July 20, 2010.

To read the full text of RR 7-2010, please click on the following link http://www.bdblaw.com.ph/index.php?option=com_dms&view=category&layout=table&Itemid=183&limitstart=0.