Deduction and Remittance of the Withholding Tax on Wages of Seamen may be Done Within Ten (10) Days from Receipt of the Allotment from the Foreign Principal

November 5, 1991 BIR RULING NO. 224-91 50 325-87 224-91 Gentlemen : This refers to your letter dated January 30, 1991 stating that your client, Interorient Maritime Enterprises, Inc. (Interorient) is a manning agency with offices at 608 Ortigas Bldg., Ortigas Ave., Pasig, Metro Manila; that the withholding tax liabilities of its seamen can be paid only after the monthly remittance of their home allotments has arrived; that in practice, the foreign owners remit to your client, the crews allotments between the 15th and 20th date of the month following the said allotments are due, which means that Interorient is in a position to remit the taxes due only on or about the said date; that on the other hand, if Interorient advances the withholding tax from its own funds, then it faces the possibility that it would never recover the amount paid in case the shipowners fail to remit the allotment or if remitted, but unnecessarily delayed, the manning agency will just the same be penalized. cdt In connection therewith, you are requesting that Interorient be allowed to pay the withholding taxes of its seamen on the 30th of each consecutive month. In reply thereto, I have the honor to inform you that every employer or person having the control, receipt, custody, disposal or payment of compensation to be received by citizens of the Philippines for services performed outside of the country irrespective of the number of days of such service during the calendar year shall deduct and withhold the tax due thereon. (Sec. 7. 211, Revenue Regulations No. 6-82) Pursuant to Section 2 of Revenue Regulations No. 5-85 taxes deducted and withheld on compensation income shall be remitted within ten (10) days after the end of each calendar month. However, since as represented no withholding of the tax can be undertaken unless the withholding agent receives the income subject to withholding, this Office believes and so holds, that the deduction and remittance of the withholding tax on wages may be done within ten (10) days from receipt of the allotment from your client's foreign principal without penalty. Very truly yours, (SGD.) JOSE U. ONG Commissioner