BIR Ruling

May 5, 1970 Mr. Arcellano J. Calls 1488 Rhode Island Street San Francisco, California U. S. A. S i r : This refers to your letter dated March 24, 1970 requesting information on a question stated as follows: "I should like a verification from your good office about the statement of Philippine Tax Exports here that income earned here in California by Filipino Nationals living in California may not be reported as income in the filing of Income Tax Return in the Philippines. This was also the opinion of Senator Emmanuel Pelaez during his brief stopover here in San Francisco, California, U.S.A. Further, that only income earned in the Philippines should be reported in the filing of Philippine Income Tax Return." casia In reply, I have the honor to inform you that under Section 45 of the National Internal Revenue Code of the Philippines, a Filipino citizen, whether residing in the Philippines or abroad, should file an income tax return declaring therein income from all sources, i.e., income earned from within and without the Philippines. The mere fact of Philippine citizenship is sufficient to support the power of Government to subject a person to income tax even though neither such person nor any of his property has a situs within the Philippines. The basis reason for the taxation of citizens residing abroad on their income from sources without the Philippines is that the Government affords them due protection and has personal jurisdiction on them. (Cook vs. Tait, 265 U.A. 47, 68 L. Ed. 895, 44; Law of Federal Income Taxation, Mertens, Vol. 1, p. 149 and Vol. 8, p. 243; U.S. vs. Bennet, 232, U.S. 299; Philippine Political Law, Cinco, p. 473) Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue