BIR Ruling No. 119-65

October 25, 1965 BIR RULING NO. 119-65 3rd Indorsement Returned to the Regional Director, B.I.R. Regional District No. 4, Quezon City, the entire docket bearing on the internal revenue case of Mr. Donald M. Cameron, a resident alien whose postal address is 218 Fernando Rein St., Pasay City, for the year 1959, involving the amount of P180.00 representing real estate dealers fixed tax and compromise penalties. This case was referred to the Law Division for resolution of the question of whether or not Mr. Donald M. Cameron is subject to the real estate dealers fixed tax on his gross rental income of P9,340.00. cd The records disclosed that subject taxpayer who is a resident alien, is a recipient of income from rental properties located in the United States of America; that on account of the said income this Bureau assessed subject taxpayer for real estate dealers fixed tax under Assessment/Demand No. 3898-65-B; but that in a letter dated June 16, 1965, Mr. D. M. Cameron requested for the cancellation of the aforementioned assessment on the ground that he is not subject to the real estate dealers fixed tax. Being a resident alien, Mr. Donald M. Cameron is subject to Philippine income tax on his rental income of P9,340.00 (Sec. 21, N.I.R.C.). However, he is not subject to the real estate dealers fixed tax because his business as a real estate dealer is operated outside the jurisdiction of the Philippines. "A state's power of taxation, however vast in its character, searching in its extent, is confined to subjects which are within its jurisdiction, and the tax laws of a state can have no extraterritorial operation." (51 Am. Jur. Sec. 59 p. 88). Be guided accordingly. Very truly yours, (SGD.) MISAEL P. VERA Acting Commissioner of Internal Revenue