Weightlifter Hidilyn Diaz made history as she became the first Filipino to bag a gold medal in the Olympic Games.
After Hidilyn’s feat, people are wondering about the monetary and in-kind rewards that she will receive. Are these rewards taxable? Will the Bureau of Internal Revenue go after her? Will she enjoy the entirety of the prize – or will this be another weight she has to conquer? Read on.
Will the national government provide a cash incentive for Hidilyn’s victory in the Tokyo Olympics? How much does a gold medalist receive? Is it taxable?
Yes, under Republic Act No. 10699, the national government through its sports agency, the Philippine Sports Commission (PSC), will provide a cash incentive of P10 million to Olympic gold medalists. Incentives granted to athletes who competed in local or international sports competitions are exempt from income tax pursuant to Section 32 B.7.d of the Tax Code. Thus, Hidilyn will receive the money in full.
Other than the incentive provided by the national government, are private companies and individuals allowed to give cash incentives to Hidilyn? What would be the tax implications of this?
Yes, aside from the incentive Hidilyn is bound to receive from the PSC, private companies may provide similar cash rewards or incentives.
Hidilyn is now expecting to receive P10 million from the MVP Sports Foundation, P10 million from San Miguel Corporation, P3 million from House Deputy Speaker Mikee Romero, P5 million from Phoenix Petroleum (with free fuel for life), and P2.5 million from her hometown Zamboanga City, amounting to P30.5 million and counting.
In addition to cash rewards, Philippine Olympic Committee president Bambol Tolentino will give her a house and lot in Tagaytay City, Megaworld Corporation offered to give her a residential condominium unit in Eastwood City, Century Properties promised a house and lot, and Foton is giving a van. AirAsia also awarded her lifetime free flights.
Now, what would be the tax consequences of those incentives?
The properties and cash incentives from private companies and individuals will be treated as donations that are subject to 6% donor’s tax.
The tax will not be payable by Hidilyn, but by the donors.
We congratulate Hidilyn for bringing home the gold medal and for all the rewards she’s bound to receive – no deductions.
Proper compliance is key to avoiding problems with the BIR. Going against tax laws and due process will only get you in bigger trouble. Want to save money from taxes and keep your business worry-free? Stay updated on the latest regulations, ensure proper documentation, submit requirements on time, and file the right taxes. Visit https://www.acg.ph today! – Rappler.com
Mon Abrea, CPA, MBA, is the co-chair of the Paying Taxes-EODB Task Force. With the TaxWhizPH mobile app as his brainchild, he was recognized as one of the Outstanding Young Persons of the World, an Asia CEO Young Leader, and one of the Ten Outstanding Young Men of the Philippines because of his tax advocacy and expertise. Currently, he is the chairman and CEO of the Asian Consulting Group and trustee of the Center for Strategic Reforms of the Philippines – the advocacy partner of the Bureau of Internal Revenue, Department of Trade and Industry, and Anti-Red Tape Authority on ease of doing business and tax reform. Visit www.acg.ph for more information or email him at email@example.com and download the TaxWhizPH app for free if you have tax questions.