ITAD BIR Ruling No. 239-15

July 29, 2015 ITAD BIR RULING NO. 239-15 Article XII, Section 45, PH-ADB Headquarters Agreement Evelyn D. Austria-Garcia Assistant Secretary, Office of Protocol Department of Foreign Affairs 2330 Roxas Blvd., Pasay City Manila, 1000 Dear Assistant Secretary Austria-Garcia, This refers to the 15 June 2015 letter of Ms. Noriko Ogawa, Deputy Director General, Pacific Department of the Asian Development Bank ("ADB"), forwarded by your Office, requesting for a certification on income tax payment exemption in relation to the performance of her official duties, pursuant to Article XII, Section 45 of the Agreement between the Government of the Republic of the Philippines and the Asian Development Bank regarding the Headquarters of the Asian Development Bank dated 22 December 1966 ("PH-ADB Headquarters Agreement"), as cited in Section 2 (d), paragraph 1 of Revenue Memorandum Circular ("RMC") No. 31-2013 (Guidelines on the Taxation of Compensation Income of Philippine Nationals and Alien Individuals Employed by Foreign Governments/Embassies/Diplomatic Missions and International Organizations Situated in the Philippines). EATCcI In reply, please be informed, as clarified under RMC No. 31-2013, that only officers and staff of the ADB, who are not Philippine nationals, are exempt from tax in respect of salaries and emoluments paid by ADB. Thus, Article XII, Section 45 of the Agreement between the Government of the Republic of the Philippines and the Asian Development Bank regarding the Headquarters of the Asian Development Bank dated 22 December 1966 provides, as follows: "Article XII Privileges and Immunities of Governors and Other Representatives of Members, Directors, President, Vice-President and Others Section 45 Officers and staff of the Bank, including for the purposes of this Article experts and consultants performing missions for the Bank, shall enjoy the following privileges and immunities: xxx xxx xxx (b) Exemption from taxation on or in respect of the salaries and emoluments paid by the Bank subject to the power of the Government to tax its nationals; xxx xxx xxx" Based on the foregoing, considering that Ms. Noriko Ogawa, Deputy Director General, Pacific Department of ADB, is an officer of the bank who is not a Philippine national, this Office is of the opinion that Ms. Noriko Ogawa is exempt from tax on the salaries and emoluments paid to her by the Asian Development Bank. This ruling is issued on the basis of the facts as represented. However, if upon investigation it shall be disclosed that the actual facts are different, then this ruling shall be without force and effect insofar as the herein parties are concerned. DHITCc Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue