Implementation of Withholding Tax on Compensation of Filipinos Employed in U.S. Military Bases/Facilities in the Philippines

July 19, 1983 REVENUE MEMORANDUM CIRCULAR NO. 22-83 SUBJECT : Implementation of Withholding Tax on Compensation of Filipinos Employed in U.S. Military Bases/Facilities in the Philippines TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, notice is hereby given that 1. Effective October 1, 1983, the Philippine income tax shall be withheld from the compensation of Filipinos employed by the Armed Forces of the United States in connection with the construction, maintenance and operation of the United States bases/facilities; 2. The implementation of the withholding tax system has been initiated at the request of the Government of the Philippines to promote the convenience of the said employees in complying with their income tax obligations, and the Government of the United States in complying with that request, incurs no obligation with respect to any reduction in net compensation arising from the withholding of tax; 3. Each Filipino employee shall be required to accomplish the Employee's Withholding Exemption Certificate (W-4) in four (4) copies pursuant to the withholding tax laws and regulations. Three (3) copies thereof shall be filed with the authorized officer of the U.S. facility at the designated time and place. An employee who fails to file the withholding exemption certificate, or has other employers from whom he receives higher compensation than that from the Government of the United States, shall fall under the schedule for zero exemption. Likewise, when both spouses are employed, the wife shall also be considered as falling under the schedule for zero exemption; and 4. The employee shall pay the difference between the amount of the credit for tax withheld for three (3) months and the tax due on his income tax return for 1983, since his remuneration or compensation from January to September in this initial year of implementation has not been subjected to the withholding tax. cd All Internal Revenue Officers are hereby enjoined to give this Circular the widest publicity possible. (SGD.) RUBEN B. ANCHETA Acting Commissioner