Tax Exemption of Expert's Local Compensation Income under the Official Development Assistance Program

May 13, 1999 BIR RULING NO. 066-99 28 (b) (6)-000-00-066-99 Mr. Axel Pfeiffer San Eligius Jewelry Training Center Cottage Industry Technology Center 20 Russet St., SSS Village Marikina City S i r : This refers to your letter dated April 20, 1997 requesting in effect for a ruling exempting your local compensation income in the amount of P10,000.00 per month from the payment of income tax. It is represented that you are a jewelry consultant working at San Eligius Jewelry Training Center as an integrated expert under the Official Development Assistance, Program; and that under Article VII(5) of the " Agreement on Cooperation Between the International Organization for Migration and the Government of the Philippines ," in the implementation of the Integrated Expert Program, the Government of the Philippines under the framework of existing international agreement will exempt Integrated Expert from personal income tax or other direct taxes on salary and stipends received solely and by reason of services rendered under the Program. cdlex In reply, please be informed that under then Section 28(b)(6) of the Tax Code, as amended, [now Section 32(B)(5) of the Tax Code of 1997] income of any kind, to the extent required by any treaty obligation binding upon the Government of the Philippines shall not be included in gross income and shall be exempt from taxation under Title II of the Tax Code, as amended. (now also Title II of the Tax Code of 1997) Such being the case, and since the aforesaid obligation to exempt from income tax the salary of an Integrated Expert is binding upon the Government of the Philippines, your local compensation income in the amount of P10,000.00 per month derived from your employer as an Integrated Expert under the Official Development Assistance Program is exempt from the payment of income tax pursuant to Section 28(b)(6) of the Tax Code, as amended. [now Section 32 (B)(5) of the Tax Code of 1997. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group