Tax Exemption Granted to U.S. Department of Defense American Civilian Base Employees

July 8, 1988 BIR RULING NO. 365-88 29 (b) (6) 000-00 365-88 M a d a m : This refers to your letter dated November 14, 1986, requesting a ruling as to whether U.S. Department of Defense American civilian base employees are required to file Philippine income tax return. cdti It is represented that you are an American civilian employed in an official U.S. Department of Defense position at the U.S. Facility, Philippine Subic Command. In reply, please be informed that Sec. 2, Art. XII of the RP-US Amended Military Bases Agreement provides as follows: "2. No national of the United States serving in or employed in the Philippines in connection with the construction, maintenance, operation or reason only of such employment, or his spouse and minor children and dependent parents of either spouse, shall be liable to pay income tax in the Philippines except in respect of income derived from Philippine sources or source other than the United States source." (emphasis ours) Such being the case, you are exempt from the payment of Philippine income tax and the filing of the corresponding income tax return with respect to income derived from your aforesaid employment. cd Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner