BIR Ruling No. 050-80

November 7, 1980 BIR RULING NO. 050-80 20-e 000-00 50-80 The Chief, International Operations Division B.I.R., Diliman, Quezon City S i r : This refers to your Memorandum dated May 21, 1980 requesting clarification whether employees and executives employed by local corporations and local businessmen in the country who have been issued immigrant visas/ working visas due to the nature of their work are considered non-resident citizens as defined in Section 20(e) of the Tax Code of 1977, as amended by P.D. No. 1457, pertinent portion of which provides: "Sec. 20. Definitions . When used is this Title . . . xxx xxx xxx "(e) (1) The term "non-resident citizen" means one who establishes to the satisfaction of the Commissioner the fact of his physical presence abroad with a definite intention to reside therein. "(2) 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 nonresident citizen for such taxable year with respect to the income he derived from foreign sources from the date he actually departed from the Philippines." In reply, you are informed as follows: 1. Under the above-quoted provision of law, the fact that a Filipino citizen leaves the Philippines either as an immigrant, for permanent employment or contract worker shows the intent to reside abroad. If he left this country not under these categories he had no intention to reside abroad. Consequently, the possession of an immigrant visa proves that a Filipino intends to reside abroad. The stay of at least 183 days abroad is necessary to prove intention to reside therein in the case of a contract worker. Pilots, stewardesses and other crew members plying international routes who are holders of immigrant visas or working visas and have left the Philippines qualify as non-resident citizens. The fact that their salaries are paid locally does not remove them from this category. This rules applies also to seamen. 2. Employees of a local management and contracting firm having overseas contract of employment for 12 months or more are contract workers and would qualify as non- resident citizens even if their salaries are paid locally, provided, that they stay outside the Philippines for not less than 183 days during the taxable year. 3. Businessmen and professional practitioners staying abroad as holders of immigrant visas are considered non-resident citizens, even if such stay is less than 183 days. The requirement of having stayed outside the Philippines for not less than 183 days during a taxable year applies only in the case of a contract worker in order to be considered physically present abroad most of the time during the taxable year [Sec. 2(c), Revenue Regulations No. 1-79]. Please be guided accordingly. cdt Very truly yours, ROMULO M. VILLA Acting Commissioner