BIR Ruling

September 20, 1968 Mr. Colin B. Church OCED Bldg. #1 General Electric Co. Electronics Park Syracuse, N.Y. 13201 U.S.A. S i r : This refers to your letter dated March 11, 1968 requesting information on a query stated as follows: "We are estimating tax liability of a Filipino working in the United States. A typical case in point is a Filipino residing in New York state and earning solely from an American firm. He will, as we understand, have to pay personal income tax due to the Philippine government but he can claim tax credit for the amount of the tax paid to the U.S. Federal Government. Our question is can he claim tax credit for the state income tax he will pay to the New York state. Annual New York income tax at his level of earning is estimated at 43. . "We are also looking for information on allowable deduction which we believe would differ from those of the United States. We would like to receive any published information on this subject. When you send the publication please sent it as AIR PRINTED MATTER and charge it to us." In reply, I have the honor to inform you that a Filipino earning or doing business abroad may claim as deduction or as a tax credit against his Philippine income tax any income tax, war profits tax and/or excess-profits tax paid by him to the foreign government if he signifies in his return his desire to avail of such credit. The tax credit claimed against the Philippine income tax covers the total amount of income tax the total amount of the income tax paid by them to the State of New York and to the U.S. Federal Government. Moreover, Filipinos who want to avail of a tax credit should signify in their income tax returns their desire to avail of this benefit and should attached thereto a copy of the return filed with the foreign government together with the proof of tax payment, i.e., photostat copy of the tax receipt or the equivalent of BIR Form W-2. In this connection, the taxpayer should establish to the satisfaction of the Commissioner of Internal Revenue of the Philippines the following: (1) the total amount of income derived from source without the Philippines; (2) the amount of income derived from each country; and (3) all other information necessary for the verification and computation of such tax credit. For your information and guidance on Philippine income tax laws and regulations, there is enclosed herewith a copy of our "Income Tax Primer". iatdc Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue