BIR Ruling

August 18, 1967 Mr. Alfonso Sioson 417 General Luna St. Malabon, Rizal S i r : This is with reference to your letter dated April 13, 1967 to the Editor the Philippines Free Press P.O. Box 457 Manila, which was referred to this Office for action regarding your inquiry as to whether or not the payment of the additional residence tax (Class "B" Residence Certificate) constitutes double taxation in the sense that the basis for the said tax is the same or is already included in the real estate property tax and the income tax. LLpr In reply thereto, I have the honor to inform you that in order to understand the term "double", as used by the courts, it is necessary to keep in mind that the term is used in different senses, and that what is said by the courts as to double taxation, using the term in its strict legal sense, is not always applicable to double taxation, using their term in its broad and popular sense, and vice versa. Duplicate taxation may be direct or indirect. Direct duplicate taxation, and by this is meant "double taxation" in the strict legal sense of the term, means taxing twice, for the same purpose, in the same year, some of the property in the territory in which the tax is laid, without taxing all of it a second time and such taxation is one invariably condemned. (Baldwin Tool Works v. Blue. 240 Fed. 202, 210.) Accordingly, to constitute double taxation objectionable or prohibited, the two or more taxes must be: (1) imposed on the same property; (2) by the same state or government; (3) during the same taxing period; and (4) for the same purpose. The purpose and basis, it must be observed, of the residence tax is not the same as the income tax. The imposition of the additional residence tax does not, therefore, constitute double taxation. cdta Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue