#AskTheTaxWhiz: Can BIR tax 'X Factor' winner Marlisa Punzalan?
Can the Bureau of Internal Revenue (BIR) tax the prize money of "X Factor Australia" winner Marlisa Punzalan? Is she not exempted?
Yes. If she is a Filipino citizen, the BIR can collect taxes on her income from all sources including her prize money from the X Factor competition in Australia. Unless the prize money has been subject to a higher tax, Marlisa will have to pay the tax on her winning!
Only Overseas Filipino Workers (OFWs) are exempted from paying income tax under Revenue Regulations No. 5-2001. The privilege, however, is limited to the salaries of OFWs registered with the Overseas Workers Welfare Administration (OWWA) of the Department of Labor and Employment.
Is the BIR guilty of double taxation for collecting taxes from Manny Pacquiao and "X Factor Israel" winner Rose Fostanes?
No. It will be considered double taxation only if even after Manny Pacquiao has proven his tax payment abroad, the BIR continues to collect taxes from the same income or winnings.
Are all winnings taxable?
No. Philippine Charity Sweepstakes and Lotto winnings are exempted from tax.
My friends and I made a bet on whether Marlisa will be the grand champion or not. Are winning bets taxable? In case we lose, can we claim it as a deductible loss or expense?
Yes. Winning bets like any other sources are taxable but losses from bets are not deductible.
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Mon Abrea is a former BIR examiner and an advocate of genuine tax reform. He serves as chief strategy officer of the country’s first social consulting enterprise, the Abrea Consulting Group, which offers strategic finance and tax advisory services to businesses and professionals. Mon's tax handbook, Got a Question About Taxes? Ask the Tax Whiz! is now available in all bookstores nationwide. Follow Mon on Twitter: @askthetaxwhiz or visit his group’s Facebook page. You may also email him at firstname.lastname@example.org.