Income Salaries in U.S. Dollars to be Converted at Official Parity Rate of Exchanges for Income Tax Purposes

May 10, 1967 BIR RULING NO. 019-67 Messrs. Ross, Salcedo, Del Rosario Bito & Misa P.O. Box 781 M a n i l a Gentlemen : This refers to your letters dated February 27, 1967 requesting information on queries stated as follows, to wit: lexlib "A Filipino citizen is employed by a foreign corporation or a domestic corporation with a branch office abroad. Under the terms of employment, he is required to render services in a foreign country for more than six (6) months or at least a year, with a compensation or salary and allowances payable abroad or in his place of employment in the foreign country. "QUESTION: "1. At what rate of exchange should his salary in U.S. dollars be converted to Philippine pesos at the parity rate or at the actual conversion rate of exchange in the Philippines at the time of payment thereof? (By conversion rate is meant the banks' buying rate). "2. At what rate of exchange should the U.S. dollar be converted into the Philippine peso if one half () of the salary is paid abroad and the balance paid in the Philippines in U.S. Currency?" In reply thereto, I have the honor to inform you that pursuant to Executive Order No. 195, dated November 6, 1965, the parity value of the peso was modified from US $0.50 to US $0.2564103. In effect, the official parity of the Philippine peso to the U.S. dollar became P3.90 to $1.00, effective November 8, 1965. Accordingly, for income tax purposes, salaries or emoluments received in U.S. dollars should be converted at the aforementioned official parity rate of exchanges. Every citizen of the Philippines of lawful age, whether residing at home or abroad, are required under Section 45 of the Tax Code to file income tax returns. Hence, his income, salaries or emoluments in U.S. dollars, whether received in the Philippines or abroad should be reported at the rate of P3.90 to $1.00. casia Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue