BIR Ruling

May 10, 1973 Mr. Silverio A. Beltran 93 Rivera Street Dagupan City S i r : This refers to your letter dated November 10, 1972 addressed to the Department of Public Information, Malacaang, Manila, which was referred to this Office for appropriate action. In said letter you requested information as to what are the taxes your son ought to pay, and as to whatever is necessary for him to do under the New Society. You stated that your son is a Filipino immigrant to the United States; and, that he and his family would like to visit the Philippines for a vacation. cdtech In reply, I have the honor to inform you as follows: Your son is subject to Philippine income tax. He is required to file income tax return wherein all income from sources within and without the Philippines should be declared. On income derived from sources within the Philippines, non-resident Filipino citizens are subject to the progressive rates of income tax imposed by Section 21 of the tax Code as amended by Presidential Decree No. 69 ranging from 3% upon the amount by which the taxable net income does not exceed P2,000 and rising gradually to 70% upon the amount by which the taxable net income exceeds P500,000.00 while on their income from all sources without the Philippines, they shall pay rates graduated as follows: On the first $6000 1% On the amount exceeding $6000 not exceeding $20,000 2% On the amount exceeding $20,000 3% Total equals amount of the tax due and payable. Thus, a non-resident citizen who earned from sources outside the Philippines, a total gross income of $6,010.00 shall pay an income tax of $60.20 computed as follows: First $6000 x 01% = $60.00 Excess over $6000 - $10 x 02% = .20 Income tax due on $6,010. = $60.20 This computation shall apply to income derived by non-resident Filipino citizens from sources outside the Philippines starting January 1, 1972 (See Sec. 12, Presidential Decree No. 69), the corresponding income tax of which is payable at the time of the filing of the return on or before April 15, 1973. Under Section 21 of the Tax Code as amended, non-resident Filipino citizens are those who establish to the satisfaction of the Commissioner of Internal Revenue the fact of their physical presence for an uninterrupted period which includes an entire taxable year. Section 190 of the Tax Code, as amended by Presidential Decree No. 69 grants exemption to returning residents from the compensating tax on articles brought into the Philippines and accompanying them upon their return or arriving within ninety days before or after their arrival regardless of period of stay abroad and value of articles brought. In this connection, please be informed that your son must bring with him (1) Copies of Philippine income tax returns filed in 1971, 1970 and 1969 and evidence of payment if any; (2) That if he paid income tax in the U.S., to bring evidence of such payment, so such payment can be credited against Philippine income tax and thus reduce his Philippine income tax liability. cdt Very truly yours, (SGD.) CONRADO P. DIAZ Acting Commissioner of Internal Revenue