BY GEROME DALIPE IV
ILOILO City – Rewards and incentives given to victorious Olympic athletes like double gold medalist Carlos Edriel Yulo are “arguably” non-taxable income, according to Ateneo Law professor and taxation law book author Mickey Ingles.
On his social media page, Ingles recently shared his 2021 article on the matter after Yulo bagged two gold medals in gymnastics, which come with cash rewards and other perks for his achievements in this year’s Olympics in Paris, France.
Ingles stated that similar cash rewards and perks that Hidilyn Diaz received after she won a gold medal from weightlifting are “arguably” tax-free.
He cited Section 32 (B) (7) (d) of the Tax Code, which states that all prizes and awards granted to athletes in international sports competitions sanctioned by the respective national sports associations are excluded from the athlete’s taxable income.
An Olympian’s prize should thus be excluded from taxes, he said.
But Ingles emphasized that he used the qualifier “arguably” since the Bureau of Internal Revenue might later argue that the cash prizes and incentives were awarded not in the Olympics, but because of the sporting event, hence, can be subjected to tax.
“It may seem like a thin way of interpreting the Tax Code, but it’s an interpretation that may carry weight (pun intended), given the fact that tax exemptions are strictly construed against the taxpayer,” Ingles stated.
The lawyer said Olympians could be protected from income tax if the cash prizes are treated as donations or gifts as these are excluded from an individual’s gross income.
In this case, however, Ingles said the donor has to pay a donor’s tax equivalent of six percent on the promised amounts over P250,000. In this way, he said the tax liability would be shifted to the donors and not the athletes.
Under Republic Act No. 10699, also known as the National Athletes and Coaches Benefits and Incentives Act, cash incentives and other forms of rewards given to national athletes and coaches are exempt from all kinds of taxes, fees, and charges imposed by the government.
The above law also states that Olympic gold medalists are entitled to P10 million from the Philippine Sports Commission. Silver medalists get P5 million and bronze medalists P2 million. Hence, Yulo’s double-gold feat would entitle him to a whooping P20 million.
Megaworld has pledged Yulo a fully furnished three-bedroom condominium unit in McKinley Hill valued at P32 million and a cash prize of P3 million.
The House of Representatives will also reward him with P3 million. The Philippine Olympic Committee will give a house and lot to gold medalists.
International Container Terminal Services Inc. has also offered P5 million to gold medal-winning Philippine Athletics and Track and Field Association athletes, which includes EJ Obiena, John Cabang, and Lauren Hoffman. Silver and bronze medalists will be offered smaller amounts.
The other cash prizes and incentives that Yulo will receive so far also include:
* ArenaPlus to award P5 million to its brand ambassador Carlos Yulo.
* Century Properties Group to award Carlos Yulo a house and lot in Nasugbu, Batangas worth P6 million.
* Business tycoon Dennis Uy pledged P5 million through his Siklab Atleta Pilipinas Sports Foundation.
* Lifetime free buffet from Vikings.
* Lifetime free food and drinks on all branches from Tipsy Pig.
* Lifetime free engineering design from Nexa Engineering.
* Free furniture worth P100,000 from Apollo Home Depot.
* Lifetime double box from BOK Korean Fried Chicken.
* Lifetime free meals from JT’s Kalayaan.
* Free franchise from Don Macchiatos.
* Lifetime free gastrointestinal and colonoscopy consultation from Dr. Virgin Lo, known as “PinoyGastro.”/PN
