BIR Ruling

May 4, 1973 Mr. Pablo L. Marciano 28 Basa St., San Francisco del Monte Quezon City S i r : This refers to your request for information as to whether you are still required to file income tax returns and pay income tax even if you are already 74 years old. cdtech It is represented that you are receiving pensions from the United States as a retired employee of the Southern Pacific Railroad Company, U.S.A.; that you came home to the Philippines in September, 1968 and since then you had been paying income tax on your said pensions, interests on bank deposit and other investments in the Philippines. In reply, I have the honor to inform you that under Section 45 (a)(1)(A) & (B) of the Tax Code, as amended by Republic Act No. 6110, every Filipino citizen, whether residing in the Philippines or abroad, and every alien residing in the Philippines regardless of whether his income was derived from sources within or outside the Philippines are required to file income tax returns and to pay the tax due thereon. Unlike the retirement benefits of government employees in the Philippines which by express provisions of law are exempt from income tax, there is no law which exempts from income tax retirement benefits or pensions received by retirees, whether Filipino citizens or resident aliens, for previous services rendered on account of employment in the United States. Furthermore, Section 29(b) of the Tax Code does not exempt the said retirement benefits or pensions from income tax. Republic Act No. 4917 is by express provision applicable only to retirement benefits of officials and employees of private firms in the Philippines. In view of all the foregoing, this Office is of the opinion and so holds that regardless of age, you are required to file annually an income tax return and pay the corresponding income tax due thereon if your annual gross income which includes said pensions amounts to P1,800.00. Very truly yours, (SGD.) CONRADO P. DIAZ Acting Commissioner of Internal Revenue