BIR Ruling [UN-194-94]

July 1, 1994 BIR RULING [UN-194-94] International Food Policy Research Institute 1200 Seventeenth Street, N.W. Washington, D.C. 20036-3006 U.S.A. Attention: Mr . Curtis Farrar Director Administration and Finance Gentlemen : This refers to your letter dated June 15, 1994 clarifying the tax status of Filipino citizens who are employed by the International Food Policy Research Institute (IFPRI), an international organization located in Washington, D.C. In reply, please be informed that Filipino citizens employed by international organizations are considered as non-resident citizens subject to tax on income derived from all sources from within and without the Philippines during each taxable year (Section 21(a) and (b), Tax Code). However, compensation for services by a citizen or resident of the Philippines for a foreign government or an international organization is not subject to withholding tax considering that we do not have any jurisdiction to appoint a withholding agent in a foreign government or an international organization. In view thereof, as an international organization, you are not required to withhold any tax on compensation payments made by you to your Filipino employees. It should be noted, however, that the said Filipino employees are required to declare such income earned from IFPRI in their income tax returns, which they are required to file pursuant to Section 44 of the Tax Code, as amended. (BIR Ruling No. 228-92 dated August 21, 1992) Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue