BIR Ruling

December 1, 1971 Mr. Ladislao U. Firmacion Revenue District Officer Revenue District No. 17 Olongapo City S i r : This refers to your letter dated November 18, 1971 requesting a ruling as to whether or not the pension and/or benefits being received by Filipino civilian employees from the U. S. Government's Social Security Commission are subject to the payment of income tax. In reply, I have the honor to inform you that under Section 45(1) (A) of the Tax Code, as amended by Republic Act. No. 6110, every Filipino citizen, whether residing in the Philippines or abroad, regardless of whether his gross income was derived from sources within or without the Philippines, is required to file an income tax return. The tax-exempt trust funds established under Republic Act No. 4917 are by express provision of law applicable only to retirement benefits of officials and employees of private firms in the Philippines. The tax exemption under Republic Act No. 360 as regards the pensions, compensations, and other benefits granted or administered by the U. S. Veterans Administration applies only to Filipino veterans. In view thereof, and considering that there is no law declaring U. S. Social Security pensions and/or benefits being received by Filipino civilian employees from the U. S. Government exempt from income tax, they are necessarily subject to Philippine income tax. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue