BIR Ruling [DA-079-03]

March 17, 2003 BIR RULING [DA-079-03] 24 (A) (1) (c); DA 676-99 Mr. Lemton Fernandez Agricola 617 A.B Fernandez Avenue Dagupan City S i r : This refers to your letter dated July 23, 2002 requesting in effect for the grant of tax amnesty in your favor. It is represented that 1. You were born in Honolulu, Hawaii. Your father, Saturnino Fernandez is of Filipino descent, born in Baguio City, Philippines. Your mother, Gloria S. Toyota, a Japanese descent, was born in Maui, Hawaii. 2. Your wife, Venjie Llamas Agricola is 100% Filipino. She was born in Lingayen, Pangasinan. 3. Except for your youngest daughter, Karen, who was born in Dagupan City, Pangasinan, you and the rest of your family consisting of your wife, Venjie Llamas Agricola, your son, Anthony and daughters Genia and Angie hold U.S. citizenship. 4. In 1991, you entered the Philippines as "balikbayan," together with your wife and children. Back then, you had very little knowledge of what your obligations were to the Philippine Government as foreigners. 5. You are a co-founder of Project A.D.A.M (Anti-Drug Abuse Movement) in Dagupan City and a volunteer drug consultant and lecturer actively conducting drug and child abuse prevention programs in the Philippines for 8 years. You have spoken to more than 300,000 people through seminars, training and work shops in Region 1 and other parts of the Philippines and have had the opportunity to distribute goods worth about P100,000 from your contacts abroad carried on flight by friends in Hawaii. For your unselfish service, you have received various national, regional and provincial awards, certificates, and plaques. 6. However, you failed to change your status from tourists to permanent residents. In reply, we regret to inform you that as of this date, no tax amnesty is being given by the Government except for the Voluntary Assessment and Abatement Program (VAAP) which cannot apply to your case anyway since it is available only to taxpayers with underdeclared sales/receipts/income for the calendar and fiscal years 2000 and 2001, and the first and second quarters ending June 30, 2002. ATCEIc For purposes of taxation, you are considered a resident alien or one whose residence is within the Philippines and who is not a citizen thereof (Section 22(F) of the Tax Code of 1997). In line with the source rule of income taxation, resident aliens are now taxed only on their Philippine-sourced income. Thus, subject to penalties and interests, your tax shall be computed pursuant to Section 24(A)(1)(c) of the Tax Code of 1997, in accordance with and at the rates established in the following schedule: Not over P10,000 5% Over P10,000 but not over P30,000 P500 + 10% of the excess over P10,000 Over P30,000 but not over P70,000 P2,500 + 15% of the excess over P30,000 Over P70,000 but not over P140,000 P8,500 + 20% of the excess over P70,000 Over P140,000 but not over P250,000 P22,500 + 25% of the excess over P140,000 Over P250,000 but not over P500,000 P50,000 + 30% of the excess over P250,000 Over P500,000 P125,000 + 32% of the excess over P500,000 in 1998 Please be guided accordingly. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group