BIR Ruling

March 20, 1970 Mr. J. V. Macuja Acting Chairman Development Bank of the Philippines Makati, Rizal S i r : This refers to your letter dated February 24, 1970 stating the following: "That in the near future there is a possibility that the DBP Bank shall act as a Trustee of a loan granted to the National Government (World Bank for reconstruction and development. And among the projected conditions of the loan will be one in which the trustee is required to engage a consultant whom among other things, will prepare the engineering plans and drawings, international bidding documents, construction supervision, coordination of engineering works and selection of suppliers. The consultants being a foreign-based firm will be sending some foreign engineers to the Philippines. It is estimated that there will be more or less five expatriate staff with an average stay of 18 months each." On the basis of the above, you now want to be informed as to whether or not equipment, furnitures, appliances, personal and household effects brought in by the expatriates for their personal use are subject to tax; and whether or not salaries, remunerations and income received by the consultants and their foreign personnel on such engagement are taxable. In reply, I have the honor to inform you that under the foregoing circumstances, the equipment, furniture, appliances, personal and household effects which may be brought in by the expatriates for their personal use are subject to the compensating tax pursuant to Section 190 of the Tax Code in relation to Sections 184, 185, 185-A, 185-B and 186, all of the Tax Code. Moreover, salaries, remunerations and income received by the consultants and their foreign personnel on such engagement are subject to income tax in accordance with Section 21 of the Tax Code. cdti Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue