BIR Ruling [UN-360-95]

October 4, 1995 BIR RULING [UN-360-95] Ms. Salud G. Robles 8059-A Estrella Avenue San Antonio Village Makati City M a d a m : This refers to your application for the issuance of a certification relative to your residence and tax liability in the Philippines, a requirement of the United Kingdom government authority. cdtech It is represented that you migrated to the United Kingdom as an employee for six (6) years of the Amersham Gen. Hospital in Whielden Street, Amersham, Bucks., England until your retirement in April 1992; that you returned to the Philippines with the intention to remain here permanently since you did not renounce your Filipino citizenship despite your long stay in the United Kingdom as a permanent resident of that country; and that you are receiving pensions from the National Health Service Pension Agency of the United Kingdom at the rate of E106.68 per month. 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 the Philippine tax ." (Emphasis supplied) xxx xxx xxx "Section 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 pension to you by said pension office of the U.K. is 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)