BIR Ruling

April 1, 1974 C. F. Sharp & Company, Inc. 6th Floor, Philbanking Bldg. Anda Circle Port Area, Manila Attention: Mr . C . B . Austria Vice President & Treasurer Gentlemen : Reference is made to your letter dated March 7, 1974, and supplemented by your other letter dated March 21, 1974, requesting clarification on the status of withholding tax procedure on wages and salaries received by Filipinos serving as crewmembers of foreign-owned vessels, particularly as follows: cdta "1.) If a foreign shipping corporation, with Manning and/or husbanding agent in the Philippines, whose vessels touch Philippine ports for cargo loading, discharging or logistics and/or other requirements, are the Filipinos crew employed and portion of their wages paid to their respective allottees subject to withholding tax? "2.) If a seaman embarked the vessel on a particular month, say, February or March, and is still on board the ship at the end of the Calendar Year, is he entitled to file the Philippine Income Tax return under the BIR Form 17.01-C even though he has not completed one year of uninterrupted service as required? "3.) Crewmembers who joined the vessel on March '73 and disembarked as per contract on March '74, are they still required to file, their Philippine Income tax return on Bir Form 17.01-C?" In reply, I have the honor to inform you as follows: Answer to Query No. 1: Since the foreign shipping corporation is a resident foreign corporation and if the wages are paid in the Philippines, the same are subject to the withholding tax. Answer to Query No. 2 and 3. If a seaman's effective date of employment is determined as of the date he boards the vessel, under the foregoing facts, said seaman is not considered a non-resident citizen for income tax purposes and, therefore, not required to file BIR Form No. 17.01-C since he was not physically present abroad for an uninterrupted period which includes an entire taxable year. On the other hand, if his employment contract for services abroad covers an entire taxable year, although he was actually abroad for less than said taxable year, he is considered a non-resident citizen for Philippine income tax purposes. aisa dc Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR.