Living In The Philippines Forum

Living in The Philippines => RA 9225, Citizenship Retention and Re-acquisition => Topic started by: Minibrings on April 20, 2017, 05:43:59 AM

Title: Tax Implications for dual national retiring in the Philippines
Post by: Minibrings on April 20, 2017, 05:43:59 AM
Does the Philippines tax retirement income earned in the US (pension, SSN, interest/dividend income) once the dual national is living in country?
Trying to figure out what kind of hit this would be, if so.
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: Minibrings on April 20, 2017, 05:50:15 AM
Mea culpa.. they do.. I just found the site.
Ignore please.

something to consider for those considering having dual citizenship
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: Tally J on April 20, 2017, 06:43:07 AM
Would you be so kind as to provide the site?  Thank you
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: Art, just a re(tired) Fil-Am on April 20, 2017, 07:07:31 AM
Mea culpa.. they do.. I just found the site.
Ignore please.
something to consider for those considering having dual citizenship
My wife is a dual citizen, but she doesn't or hasn't earned any income retirement for the Philippine government to tax her on, maybe unless I'm no longer around and she is receiving her SBP.
So, what site have you found that dual citizens are taxed by the Philippine government?
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: Art, just a re(tired) Fil-Am on April 20, 2017, 08:12:51 AM
My wife is a dual citizen, but she doesn't or hasn't earned any income retirement for the Philippine government to tax her on, maybe unless I'm no longer around and she is receiving her SBP.
So, what site have you found that dual citizens are taxed by the Philippine government?
I believe that double taxation laws for dual citizens pertains to which country the income came from, hence no double taxation if residing in the Philippines and not earning income in the Philippines.

To answer your and my own question, found my own answer (see link)
http://tinyurl.com/mte3j26 (http://tinyurl.com/mte3j26)

As to taxes to be paid, he shall be subject to the rules of income tax under Section 23 of the National Internal Revenue Code (NIRC) which provides that “except when otherwise provided in this Code (NIRC): (a) a citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines; (b) a nonresident citizen is taxable only on income derived from sources within the Philippines; xxx. Accordingly, the Philippine government shall only tax you if you have income in the Philippines. Income under the NIRC means all income derived from whatever source. However, you don’t have to worry about the pension you are receiving from the US government being a veteran because this pension is expressly exempted by the NIRC from taxation. It is stated under Section 32 (B)(6) of the NIRC that “the following items shall not be included in gross income and shall be exempt from taxation under this title: Xxx (d) payments of benefits due or to become due to any person residing in the Philippines under the laws of the United States administered by the United States Veterans Administration”.

It also pertains to me, a U.S. citizen (not a dual citizen) with pensions from the U.S., are also tax exempted by the Philippine government, but only taxed by the U.S. government.
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: Minibrings on April 21, 2017, 02:06:56 AM
I believe that double taxation laws for dual citizens pertains to which country the income came from, hence no double taxation if residing in the Philippines and not earning income in the Philippines.

To answer your and my own question, found my own answer (see link)
[url]http://tinyurl.com/mte3j26[/url] ([url]http://tinyurl.com/mte3j26[/url])

As to taxes to be paid, he shall be subject to the rules of income tax under Section 23 of the National Internal Revenue Code (NIRC) which provides that “except when otherwise provided in this Code (NIRC): (a) a citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines; (b) a nonresident citizen is taxable only on income derived from sources within the Philippines; xxx. Accordingly, the Philippine government shall only tax you if you have income in the Philippines. Income under the NIRC means all income derived from whatever source. However, you don’t have to worry about the pension you are receiving from the US government being a veteran because this pension is expressly exempted by the NIRC from taxation. It is stated under Section 32 (B)(6) of the NIRC that “the following items shall not be included in gross income and shall be exempt from taxation under this title: Xxx (d) payments of benefits due or to become due to any person residing in the Philippines under the laws of the United States administered by the United States Veterans Administration”.

It also pertains to me, a U.S. citizen (not a dual citizen) with pensions from the U.S., are also tax exempted by the Philippine government, but only taxed by the U.S. government.


See a) sources within and without (which translates to outside country)..  but pensions are exclusively red but duvidends and interest income earned in the US I have to research
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: Art, just a re(tired) Fil-Am on April 21, 2017, 04:02:01 AM
Does the Philippines tax retirement income earned in the US (pension, SSN, interest/dividend income) once the dual national is living in country?

Simple answer, NO. Accordingly, the Philippine government shall only tax you if you have income in the Philippines. Income under the NIRC means all income derived from whatever source. However, you don’t have to worry about the pension you are receiving from the US government being a veteran because this pension is expressly exempted by the NIRC from taxation. It is stated under Section 32 (B)(6) of the NIRC that “the following items shall not be included in gross income and shall be exempt from taxation under this title:(d) payments of benefits due or to become due to any person residing in the Philippines under the laws of the United States administered by the United States Veterans Administration”.
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: bigrod on April 21, 2017, 08:58:33 AM
Military retirement pay and SBP are paid by the Department of Defense and SS is paid by the Social Security Administration.  So they are NOT administered by the US Veterans Administration.

Chuck
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: Art, just a re(tired) Fil-Am on April 21, 2017, 10:30:19 AM
Military retirement pay and SBP are paid by the Department of Defense and SS is paid by the Social Security Administration.  So they are NOT administered by the US Veterans Administration.

Chuck
it was stated, or to become due to any person residing in the Philippines under the laws of the United States administered by the United States Veterans Administration”.
IMHO, the bottom line that U.S. pensions or any form of income from the U.S. are exempt from double taxation when in the Philippines. That's all I'm saying.
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: bigrod on April 21, 2017, 11:46:57 AM
it was stated, or to become due to any person residing in the Philippines under the laws of the United States administered by the United States Veterans Administration”.
IMHO, the bottom line that U.S. pensions or any form of income from the U.S. are exempt from double taxation when in the Philippines. That's all I'm saying.

While I agree with what you are saying, the following is from taxesforexpats.com.

TAXABLE INCOME

RESIDENT CITIZENS
Resident citizens of the Philippines are taxed on all their net income derived from sources within and without the Philippines.

ALIEN INDIVIDUALS
An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines. Resident aliens are taxed in the same manner as resident citizens on income sourced within the Philippines.


Chuck
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: Art, just a re(tired) Fil-Am on April 21, 2017, 01:47:31 PM
While I agree with what you are saying, the following is from taxesforexpats.com.

TAXABLE INCOME

RESIDENT CITIZENS
Resident citizens of the Philippines are taxed on all their net income derived from sources within and without the Philippines.

ALIEN INDIVIDUALS
An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines. Resident aliens are taxed in the same manner as resident citizens on income sourced within the Philippines.

So, taxesforexpats.com agrees also. "When in Rome".
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: starrt on April 21, 2017, 02:27:00 PM
Um, well, as a Canadian living full time here in the Philippines, can I add in a few comments?

Every country has different tax treaties with different countries.
In my case, I am receiving employment income from a Canadian company for work performed in Canada via internet and phone, dividends from Canadian companies, and pension income from the Canadian government.

My employment income is not taxed in Canada as I am a non resident. I pay income tax here in the Philippines to the BIR.
My dividend income is taxed before I receive the funds by the issuing companies.
My pension income is taxed by the Canadian government before I receive any funds here.

All of these situations are covered by the tax treaty between Canada and the Philippines.

Again, each country's tax treaty is different and covers different issues, and every person's situation is different and unique, so please do not take anything at face value.

Investigate, speak to the income tax departments, speak to professionals in tax, and make sure that all rules are followed.

Thank you for letting me have my say.

Thomas
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: Steve & Myrlita on April 21, 2017, 02:55:26 PM
Thank you for letting me have my say.

Thomas
As long as it is respectful which BTW, you have always been, you are always welcome to have your say here.
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: bigrod on April 21, 2017, 03:56:19 PM
So, taxesforexpats.com agrees also. "When in Rome".

No Art they did not agree with you completely.  You are an Alien Resident and your wife is a Resident Citizen since she has dual citizen.  So by what they say she would be taxed on income here and abroad.  Now as Starrt stated it depends on what the tax treaty between the US and Philippines reads.  There the proof is in the pudding!

Chuck
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: Art, just a re(tired) Fil-Am on April 21, 2017, 04:07:20 PM
It depends on one's particular situation and the tax treaty between two countries that have jurisdiction. That's all I'm saying and not arguing who's right or wrong here.
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: balutsky on April 29, 2017, 07:05:55 PM
Check out the link on page 2.  The link was from the Philippine consulate in Los Angeles.

http://www.philippineconsulatela.org/wp-content/uploads/2015/11/dual-primer.pdf (http://www.philippineconsulatela.org/wp-content/uploads/2015/11/dual-primer.pdf)
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: UNGGOY on February 17, 2018, 09:17:48 AM
Just curious, how would the RP know if you have a foreign pension? They are not hunting down tax-dodgers with SWAT teams like the USA.
Title: Re: Tax Implications for dual national retiring in the Philippines
Post by: bigrod on February 17, 2018, 09:52:32 AM
Just curious, how would the RP know if you have a foreign pension? They are not hunting down tax-dodgers with SWAT teams like the USA.

Don't know how they would know that.  Maybe their form is similar to the US tax form where you state that the information is true and correct and penalties and jail time can be imposed.

Chuck