BIR Ruling

February 24, 1972 2nd Indorsement Returned to the Revenue Director, Revenue Region No. 6, Quezon City, the within docket bearing on the deficiency income tax case of Mrs. Antonina B. Laiz, 230-B M. Naval Street, Navotas, Rizal, involving the sum of P51.24 for the year 1962. It appears in the income tax return filed by the taxpayer that she declared the amount of P4,582.11 as salary received from the World Health Organization during the year 1962. When the said return was filed, no income tax was paid. Accordingly, on October 15, 1967, that Office issued an assessment notice demanding payment of the aforesaid amount of P51.24 as income tax and interest. In a letter dated November 3, 1967, the taxpayer acknowledged the receipt of the assessment notice and also enclosed therewith a letter dated February 22, 1963 of the Finance officer of the World Health Organization. This is in effect a claim for exemption from income tax on the salary received by her from the World Health Organization. The pertinent provisions of the agreement between the World Health Organization and the Government of the Philippines reads as follows: "Article VIII: "Section 22. Officials of the Organization shall . . .: (b) be exempt from taxation in respect of the Salaries and emoluments paid to them by the organization;. . . . "Section 21. The Director-General or the Regional Director as his duly authorized representative, shall from time to time communicate to the government of the Republic of the Philippines the names of those officials to whom the provisions of this Article and Article IX shall apply ." (Emphasis supplied) The above quoted agreement took effect on July 22, 1951 and is binding upon the Republic of the Philippines as one of its signatories and for being a member of the organization itself. (See Section 29(b)(6), Tax Code). Under the foregoing provisions of the agreement, only the officers of the WHO whose names were communicated to the Philippine Government are entitled to the exemption from the payment of income tax in respect of the salaries and emoluments received by them from the organization. In the instant case, there is no showing that such communication has been made wherein the name of the taxpayer is included. As a matter of fact, the aforesaid letter of Finance officer of the WHO, does not give any indication that the name of the taxpayer has been included as among those entitled to exemption. Such being the case, the salary of the herein taxpayer is not exempt from income tax. In view thereof, that Office is instructed to reiterate the assessment and to enforce collection thereof in the case of non-payment. CONRADO P . DIAZ Acting Commissioner of Internal Revenue