#AskTheTaxWhiz: Is there tax on prizes for our sports heroes?

If I organize a local Pokemon Go tournament, will the cash and non-cash prizes of the winner be subject to tax? How about the prizes of athletes like Hidilyn Diaz who undeniably gave pride to the Philippines? How about the cash awards and incentives the government is pledging – will these also be taxable? And how is this different from the prize money of Senator Manny Pacquiao which was allegedly not declared in his income tax return?

Yes. All cash or non-cash prizes received within the Philippines is subject to 20% final tax. However, all prizes and awards granted to athletes in local and international sports competitions and tournaments, whether held in the Philippines or abroad and sanctioned by their respective national sports association, are exempt from income tax.

It should also be noted that national sports association refers only to those sports associations duly accredited by the Philippine Olympic Committee (POC). (READ: Hidilyn Diaz receives P500K incentive from Zamboanga City – report)

Furthermore, the cash incentives to be given by the government are also tax-exempt as stated in the Incentive Act (RA 10699). However, the pledges being extended by our legislators like Senator Manny Pacquiao will be subject to 30% donor’s tax.

The boxing competitions of Senator Pacquiao are different as these are not sanctioned and accredited by the POC. Thus, his prize money is subject to income tax.

There are a lot of tax seminars being organized almost everywhere. But some are aggressively teaching us techniques which I find unethical or are possible violations of our tax code.  Where can we attend “legit” tax seminars and if possible, wherein you are the speaker?

The Philippine Institute of Certified Public Accountants (PICPA) organizes monthly tax seminars where I am one of the speakers in taxation. You can also follow us on Facebook (Abrea Consulting Group) for the programs and schedules of the Philippine Tax Academy or e-mail us at consult@acg.ph.

The Ateneo Graduate School of Business (AGSB) in Rockwell will also be offering an elective course called Tax Management (TAXMAN) next term and I will be the professor. My TAXMAN class will start on September 5, 2016. For more information, visit gsb.ateneo.edu. – Rappler.com

Got a question about taxes? #AskTheTaxWhiz! Tweet @rapplerdotcom or email us at business@rappler.com.

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 bookstores nationwide. Follow Mon on Twitter:@askthetaxwhiz or visit his group’s Facebook page. You may also email him at consult@acg.ph.