Exemption from the Tax Clearance Requirement

September 11, 1981 BIR RULING NO. 173-81 21 000-00 173-81 Mr. Timoteo P. Fernandez, Jr. Sugarland Agro-Industrial Corp. Rooms 109, Galarmi Apartments 52 Ayala Avenue, Makati, Metro Manila S i r : This refers to your letter dated October 25, 1980 requesting information as to whether Dr. Jose A. Sepulveda, who is a U.S. citizen and who practiced his profession in the Philippines for 60 days, went back to the United States for 10 days, and then returned to the Philippines practicing again therein his profession, is not required to pay Philippine taxes on account of his status as a Balikbayan. In reply, I have the honor to inform you that overseas Filipinos, i.e. Filipinos and/or their families and descendants who are now residents or citizens of other lands, who took advantage of the Balikbayan program by visiting or settling in this country, are exempt only from the tax clearance requirements in connection with their travel to and from the Philippines. However, if said Balikbayan stays in the Philippines and earns income therein, then he is subject to Philippine income tax. In view thereof, Dr. Sepulveda, a U.S. citizen, who was actively engaged on plant engineers, consultancy, and management of certain domestic corporations for the past years is subject to individual income tax as a resident alien, pursuant to Section 21 of the Tax Code. aisadc Very truly yours, RUBEN B. ANCHETA Acting Commissioner