Taxability of Non-resident Alien Individuals

October 14, 1958 BIR RULING NO. 614-58 Mr. Antonio M. Diaz Attorney-at-Law R-417, Roman R. Santos Bldg. Plaza Goiti, Manila S i r : Reference is made to your letter dated April 28, 1958, requesting information as follows: LLphil "A and B, husband and wife journalists, who are non-residents of the Philippines. They bought Philippine corporation stocks in the New York Stock Exchange and received the dividends thereof in dollars, in the United States. They have never been in the Philippines. "Q No. 1 Are they supposed to file Income Tax Returns in the Philippines for these dividends? 2 In case they are supposed to file Income Tax Returns, must they buy Res. Certificates "A" and "B" in order to file these returns? 3 Will it affect the payment of these dividends in dollars, in the United States, should they file Income Tax Returns in the Philippines and buy their Residence Certificates "A" and "B"? In answer thereto, I have the honor to inform you that aliens who are not residents of this country are subject to Philippine income tax on income derived by them from sources within the Philippines. Accordingly, and on the assumption that "A" and "B" are aliens, they should file a consolidated income tax return with the Commissioner of Internal Revenue, Manila, covering the dividends in question, such dividends having been received from sources within this country, pursuant to paragraph (a), in relation to paragraphs (b) and (d) of Section 45 of the National Internal Revenue Code. For the purpose of filing the aforementioned return, however, "A" and "B" need not secure Philippine residence certificates, classes "A" and "B" because only inhabitants of the Philippines are subject to the basic and additional residence taxes, pursuant to Section 1 of Commonwealth Act No. 465, otherwise known as the Residence Tax Law. As regards your query No. 3, it is regretted that we cannot rule thereon because the same is vague. LLjur Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue