No Double Taxation on the Payment of Additional Residence Tax and the Net Income Tax Return

March 9, 1960 BIR RULING NO. 128-60 Mr. Vicente Q. Selirio San Joaquin, Iloilo S i r : Reference is made to your letter dated January 4, 1960 stating that for the year 1959 you and your wife paid the following: LLphil 1. P1.00 residence tax, Class A 2. 4.00 additional residence tax, Class B 3. 36.00 income tax (joint income) P41.00 total taxes paid You now request an information from this Office as to whether or not you were "partly paying the government double income taxes through the additional residence tax Band the net income tax return since they are both computed and based on your joint income". In reply thereto, I have the honor to quote hereunder Section 1 and 1(c) of Commonwealth Act No. 465, otherwise known as the Residence Tax Law to wit: Section 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 is no case shall exceed one thousand pesos, in accordance with the following schedule". xxx xxx xxx "(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 ". xxx xxx xxx "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". (Emphasis supplied) And pursuant to Section 21 of the Tax Code, there shall be levied, assessed, collected and paid annually upon the entire net income received in the preceding taxable year from all sources by every individual, a citizen or resident of the Philippines, a tax equal to the sum received in accordance with the graduated rates provided therein. Under the above-quoted provisions of law, there is no double taxation because "double taxation exists only where the same kind of tax is levied twice on the same subject by the taxing power". (Commonwealth v. Harrisburg Light & Power Co., 130 A. 412, 413, 284 Pa. 175-cited in p. 343, Words & Phrases, Vol. 13) (Emphasis supplied) cdtech Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue