Revenue Regulations (RR) No. 7-2026

Date of Issuance: October 13, 2026 (BIR Official Website)

Effectivity: Fifteen (15) days following its publication in the Official Gazette or the BIR Official Website, whichever comes first.

Amending RR No. 07-10 Relative to the Burden-Sharing Agreement of Establishments Claiming Senior Citizen Discounts as Tax Deduction Pursuant to Republic Act No. 9994, Otherwise Known as the “Expanded Senior Citizens Act of 2010”

The Bureau of Internal Revenue (BIR) issued RR No. 7-2026 to amend certain provisions of RR No. 07-10 and establish clearer rules on the burden-sharing arrangement for mandatory senior citizen discounts, particularly in the pharmaceutical industry. The regulations recognize that the financial burden of the 20% senior citizen discount may be shared among retailers, manufacturers, distributors, wholesalers-retailers, and wholesalers pursuant to arrangements prescribed by the Department of Health (DOH).

Key Highlights

1. Expanded Definition Of “Establishment”

The regulations broaden the definition of establishments covered by the rules to expressly include retailers, manufacturers, and distributors of pharmaceutical products, as well as other entities participating in the supply chain that are subject to the DOH-prescribed burden-sharing arrangements.

2. Recognition Of Burden-Sharing Agreements

Entities involved in the sale and distribution of medicines may now enter into an agreement on the sharing of the burden governing the allocation of the statutory senior citizen discount. Such arrangements must be consistent with guidelines to be prescribed by the DOH.

3. Limitation On Tax Deduction Claims

The regulations clarify that where the cost of the senior citizen discount is shared among retailers, manufacturers, distributors, wholesalers-retailers, and wholesalers, the allowable tax deduction shall be limited to the portion of the discount actually borne by the taxpayer under the burden-sharing agreement. The aggregate deductible amount cannot exceed the claimant’s contractual share of the discount.

4. Continued Requirement For Actual Grant Of Discount

Only business establishments that actually grant the senior citizen discount on qualified goods and services may claim the corresponding deduction from gross income, subject to the burden-sharing rules. The deduction remains available only to taxpayers availing of itemized deductions and not to those electing the Optional Standard Deduction (OSD).