BIR Ruling [UN-069-95]

February 15, 1995 BIR RULING [UN-069-95] Mr. Cecil Frederick Inett 130 Pleasure Street Better Living Subdivision Paraaque, Metro Manila S i r : This refers to your application for the issuance of a certification relative to your residence and tax liability in the Philippines. cdi It appears that you are a British subject and an immigrant to the Philippines, with an Alien Certificate of Registration No. E00092967 Issued by the Bureau of Immigration and Deportation on October 13, 1994; that you are married to Ms. Restituta C. Papa; that you receive pensions from the Post Office Administration Centre, Chelwynd House, Chesterfield, and from the Overseas Benefits Directorate, DSI Longbenton, Newcastle Upon Tyne, which, as orally represented, is a government entity/Office. In reply, please be informed that pursuant to Article 18, paragraph (3) of the RP-UK Tax Treaty, and Section 28(b)(7)(C) of the Tax Code, as amended, stating "Article 18 " Governmental Functions "3. Pensions paid out of public funds of the United Kingdom or Northern Ireland or of funds of any local authority in the United Kingdom to any individual in respect of services rendered to the Government of the United Kingdom or Northern Ireland or a local authority in the United Kingdom in the discharge of functions of a governmental nature shall be exempt from Philippine tax." (Emphasis supplied) xxx xxx xxx "Sec. 28. . . . xxx xxx xxx "(b) Exclusions from gross income . . . . xxx xxx xxx "(7) . . . "(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 non-resident 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) the monthly pensions paid to you by said pension offices of the U.K. are exempt from Philippine Tax. Moreover, Section 28(b)(7)(C) of the Tax Code, as amended, likewise provides that said pension is not taxable in the Philippines. (BIR Ruling No. 035 - 95, dated February 15, 1995) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)