BIR Ruling

March 28, 1972 Mr. Philip N. Bigornia 55-A Iriga Street Quezon City S i r : In reply to your letter dated February 2, 1972, I have the honor to inform you that an American citizen residing in the Philippines and receiving U.S. -S.S.S. monthly retirement benefits is required to file a Philippine income tax return if his gross income which shall include the said benefits is at least P1,800.00 for the taxable year, pursuant to Section 45(a)(B) of the Tax Code. We understand that said U.S.-S.S.S. monthly retirement benefits were derived as a result of membership in the U.S. Social Security System on account of employment in the United States. 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 received by retirees 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 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. Accordingly, the above retirement benefits are subject to the payment of income tax. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue