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More interestingly in this case, the Court said that employer already recognized a defi nite liability on its
part considering that it had deducted as business expense from its gross income the accrued bonuses due
to its employees. Underlying its accrual of the bonus expense was a reasonable expectation or probability
that the bonus would be achieved. Applying the then prevailing Revenue Regulations No. 6-82, as
amended, the Court said that, in this sense, there was already a constructive payment for income tax
purposes as these accrued bonuses were already allotted or made available to its offi cers and employees.
Joanne Marie D. Macainag-Cobacha is a Tax Senior Director of SGV & Co.