BIR Ruling

January 25, 1973 Mr. Oscar B. Yuson Makati Commercial Center P. O. Box 900 Makati, Rizal S i r : This refers to your letter dated January 3, 1973 requesting a ruling on the taxability of the pension being received from the United States Government by your client who, as represented, is an American citizen, U. S. Government veteran, and a resident of the Philippines. In reply thereto, I have the honor to inform you that unlike the retirement benefits of government employees in the Philippines which by express provisions of law are exempt from income tax, there is no law which exempts from income tax retirement benefits or pensions received by retirees, whether Filipino residents or resident aliens, for previous services rendered on account of employment in the United States. Furthermore, Section 29(b) of the Tax Code does not exempt the said retirement benefits or pensions from income tax. Republic Act No. 4917 is by express provision applicable only to retirement benefits of officials and employees of private firms in the Philippines. However, as a U.S. veteran residing in the Philippines, your client may be exempt from all taxes on the pension that he is presently receiving from the U. S. Government provided that payment of such pension is being administered by the United States Veterans Administration pursuant to Republic Act No. 360. cdta Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue