Non-exemption of the SEATO Professors Teaching in the Philippines

November 19, 1959 BIR RULING NO. 594-59 The Honorable The Secretary of Foreign Affairs M a n i l a S i r : This is with reference to the restricted despatch No. STO-1543/59 dated October 12, 1959 from the Philippine Embassy in Bangkok, requesting clarification of the third paragraph of our ruling dated September 4, 1959 which reads as follows: "(1) Professor Kamol Janlskha of Thailand will be subject to the income tax on individuals prescribed in section 21 of the National Internal Revenue Code. In computing the tax his total gross receipts will include his salary of $7,000.00 and his quarters allowance of $3,000.00." Exemptions are granted expressly by law or by treaty. The exemption granted to officers and employees of the Philippine Foreign Service is expressly provided under section 6 of Republic Act No. 708, otherwise known as the "Foreign Service Act of the Philippines"' which reads as follows: "SEC. 6. Exemption from taxation . All supplemental allowances, per diems, benefits, and the like received by officers and employees of the service in consideration of their service, except their basic salaries, shall be exempt from the Philippine income tax." The above exemption cannot be interpreted so as to include SEATO professors teaching in the Philippine inasmuch as they are not officers and employees of the Philippine Foreign Service. In this connection, please be further informed that after the effectivity of Republic Act No. 2343 (June 20, 1959) income tax is paid at the time the return is filed but not later than April 15 following the close of the calendar year. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue