BIR Ruling No. 176-11

May 27, 2011 BIR RULING NO. 176-11 Tax Code, Section 32 (B) (6); 000-00 Mr. John Matthew Dunne Citi Pension House 476 M.J. Cuenco Avenue Mabolo, Cebu City Sir : This refers to your request for ruling seeking Philippine tax exemption of the pension you receive from you country of origin, the Republic of Ireland. HIcTDE Documents submitted show that you are an Irish national residing at Citi Pension House, 476 M.J. Cuenco Avenue, Mabolo, Cebu City; that you arrived in the Philippines as a tourist on July 30, 2007; that after living in the Philippines for nearly 2 years, you find it more comfortable here and conducive to your health being now 62 years of age; that it is your intention to live longer or for the foreseeable future if not permanently in the Philippines; that you are receiving assistance from your Government in the amount of P75,000.00 per month which is sufficient for your personal needs and medicines; that you are not a liability of the Philippine Government and that you stated under oath that you will comply with all the laws and ordinances of the local and national Government as well as its customs and traditions. In reply, please be informed that Section 32 (B) (6) (c) of the Tax Code of 1997 provides as follows: Section 32. Gross Income. . . . (B) Exclusion from Gross Income. The following items shall not be included in gross income and shall be exempt from taxation under this title: . . . (6) Retirement Benefits, Pension, Gratuities, etc. . . . (c) The provisions of any existing law to the contrary notwithstanding, social security benefits, retirement gratuities, pensions and other similar benefits received by resident or nonresident citizens of the Philippines or aliens who come to reside permanently in the Philippines from foreign government agencies and other institutions, private or public. (Emphasis supplied) Per your signed affidavit executed on 24 June 2009, you represented that you intend to "live longer if not permanent in the Philippines" ( sic ). On the other hand, the Tax Code, as amended, grants the benefits of exclusion from gross income of pension payments for aliens who come to reside permanently in the country. A mere intent to live longer or for the foreseeable future in the Philippines would not suffice given the clear wordings of the law. There being no clear intention to reside permanently in the Philippines as represented, we regret to inform you that we cannot grant your request. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue