Old Age is Not Considered as a Basis for Residence Tax Exemption

March 5, 1959 BIR RULING NO. 127-59 Mr. Mariano R. Gavino 843 Leo Street, Sampaloc Manila S i r : In reply to your letter dated February 12, 1959, we quote hereunder the pertinent provisions of Commonwealth Act No. 465, otherwise known as the Residence Tax Law: LexLib "Sec. 1. Persons liable to residence tax . Every inhabitant of the Philippines over eighteen years of age who has been regularly employed on a wage or salary basis for at least thirty consecutive working days during any calendar year at the rate of not less than fifty centavos a day, or who is engaged in business or occupation, or who owns real property with an aggregate assessed value of one thousand pesos or more, or who is required by law to file an income tax return shall pay an annual residence tax of fifty centavos, and an annual additional tax which in no case shall exceed one thousand pesos, in accordance with the following schedule: (a) For every five thousand pesos worth of real property in the Philippines, in excess of ten thousand pesos, owned by such person during the preceding year, the valuation to be based upon the assessment rolls of the municipality where the property is situated, two pesos; (b) For every five thousand pesos of gross receipts or earnings, in excess of ten thousand pesos, derived by such person from his business in the Philippine during the preceding year, two pesos; and (c) For every one thousand pesos of salaries or gross receipts or earnings derived by such person from the exercise of any profession in the Philippines or from the pursuit of any occupation therein during the preceding year, one peso. For the purposes of the additional tax, dividends received by the taxpayer from any corporation shall not be considered as part of his gross receipts or earnings. In the case of husband and wife, the additional tax herein imposed shall be based upon the total property owned by them or upon the total gross receipts or earnings derived by them. (As amended by Sec. 1, Rep. Act No. 1503)." "Sec. 4. Exemptions . The following shall not be taxed under this Act; (a) Diplomatic and consular representatives and officers of foreign powers; (b) Commissioned officers of the United States Army and Navy; (c) Enlisted soldiers, sailors and marines of the United States Army and Navy; (d) Civilian officers and employees of the military, naval or any other branch of the United States Government who are not Filipino citizens; (e) Transient visitors when their stay in the Philippines does not exceed three months; and (f) Barrio lieutenants and their substitutes, barrio councilors and policemen while holding office as such. (Amended by Sec. 1, Commonwealth Act No. 557, effective January 1, 1940; Sec. 1. Rep. Act No. 1503.)" The law does not consider old age as a basis for exemption. Such being the case, you are liable to the basic and additional residence tax, if you earn income or own property under the circumstances prescribed by law. LibLex Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue