Application to Claim Relief from United Kingdom Income Tax

January 11, 1995 BIR RULING NO. 005-95 20 000-00 005-95 Mr. Alfredo C. Robles, Jr. Lot 16, Blk. 4, Unit D Doa Isidora Street Kapalaran Subdivision Quezon City S i r : This refers to your letter dated January 31, 1994 stating that you have written a book entitled "French Theories of Regulation and Conceptions of the International Division of Labour", which was published in Britain in March 1994 by the Macmillan Press; that according to the Philippines-UK Tax Treaty (Art. 11), royalties from the book may be subject to United Kingdom tax unless you file the attached "Claim by an Individual to Relief from United Kingdom Income Tax on Interest, Royalties, certain Pensions and purchased Annuities derived from within the United Kingdom", that this claim must be accompanied by a Certification from the Philippines that you are now a resident of the Philippines for Philippine tax purposes; that you have been residing in the Philippines since birth, except when you went to the United States for study from 1986 to 1993; that you returned to the Philippines in August 1993 and started to work as Assistant Professor in the Department of Political Science of the University of the Philippines. Based on the foregoing representatives, you now request for a ruling to the effect that you are a resident of the Philippines, for Philippine taxation purposes, thereby supporting your application to claim relief from United Kingdom income tax. In reply, please be informed that under the RP-UK Tax Treaty, Article 4 on Fiscal Domicile provides as follows: "(1) For purposes of this Convention, the term "resident of a Contracting State means, subject to the provisions of paragraphs (2) and (3) of this Article, any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of a similar nature, an individual who is a member of the diplomatic, consular or permanent mission of a Contracting State which is situated in the other Contracting State and who is subject to tax in that other State only if he derives income from sources therein shall not be deemed to be a resident of that other State. The terms "resident of the United Kingdom" and "resident of the Philippines" shall be construed accordingly." xxx xxx xxx For Philippine income tax purposes, a "resident-citizen" is one who establishes to the satisfaction of the Commissioner the fact of his physical presence in the Philippines with the intention to reside therein. On the other hand, a citizen leaving the Philippines during the taxable year to reside abroad, either as an immigrant or for employment on a more or less permanent basis and contract workers whose contract of employment are renewed from time to time within or during the taxable year under such circumstances as to require them to be physically present abroad most of the time during the taxable year, shall be considered as a non-resident for such taxable year with respect to the income he derived from foreign sources from the date he actually departed from the Philippines. (Sec. 20(e) (1) & (2). Tax Code). Such being the case, since you have been residing in the Philippines since birth and after you study in the United States you returned to the Philippines in August 1993, you are considered a resident of the Philippines and therefore, subject to Philippine law for income tax purposes. Accordingly, you should pay your income tax here in the Philippines for your taxable income consisting of advances and royalties which you will be denying from your aforesaid book. cdta Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue