Tax in PI

[Foreigner]

Can anyone tell what the arrangements are concerning paying tax in PI?  Do you need to lodge a return each financial year?

I\'ve been told that if move to another country I\'m not obliged to pay tax in Oz on my super payments received from there if I reside overseas for a period longer than 6 months.  However, I am obliged to pay tax on income received to the country I reside. 

Is anyone else in a similar situation and does anyone else pay tax in PI? Is there a flat rate in PI?

Any advice would be welcome.

Thanks

[graham]

Hi Foreigner,

I\'m sure someone will correct me if I\'m wrong, but as far as I am aware, you do NOT pay tax in the Philippines unless you are earning money here. I have Super and the Pension. I don\'t pay tax.  Maybe Colin can chime in here as he is more experienced with hassling the Bureaucrats here than I am???

Graham

[Lee2]

My understanding is that no tax is paid on income made outside the country, but we all do pay VAT (value added tax) on most things we buy, so they get us all and everyone else who does not have to file taxes anyway. They also withold some of any interest we make in most Philippine banks, so they get us that way too but that is income earned in the country so they have a right to that IMO.

As others have said, it is probably best to check your own situation out with a tax lawyer or accountant in the Philippines to be sure if you have income other than pension etc.

[GregW]

As a general rule, income derived from an RP source is taxed in the RP.  Income derived from a foreign source is not taxed in the RP but is probably taxed in the source country.

[Foreigner]

Thanks to everyone for their responses.

I\'ve just been informed by my tax consultant that I would be required to pay tax here in Oz on any super payments before being credited into my bank account, although it would be minimal.

He also said that it would be highly unlikely that I would be required to also pay tax in PI.

Cheers

[CanoNoMo]

SUPER PAYMENTS!? Man, I\'s needz to get mee sum of dem!

[coutts00]

Think 401K instead of Super Payments same thing.

[beacon]

If one actually lives in Oz (otherwise spelled KS) then move!  That is tax state 15 out of 50.  They tax about everything.  It took a class action to prevent taxing military pensions when they did not tax state pensions.  AL does not tax SS or Federal pensions.  Lower taxes all around.

[graham]

If one actually lives in Oz (otherwise spelled KS) then move!  That is tax state 15 out of 50.  They tax about everything.  It took a class action to prevent taxing military pensions when they did not tax state pensions.  AL does not tax SS or Federal pensions.  Lower taxes all around.

Beacon, OZ is Australia, not Oklahoma.      

By the way, welcome to LinPC! (Living in the Philippines Community Forum)   

Yep Jack,

I just strolled down the \"yellow brick road\" from OZ straight to the Philippines. LOL

Graham

[Lunkan]

As a general rule, income derived from an RP source is taxed in the RP.  Income derived from a foreign source is not taxed in the RP but is probably taxed in the source country.

Things can be very different depending which other country is involved.
LOCK UP! so the countries have agreement against double taxation, so you don\'t risk to pay tax in both countries for SAME income.

I suppose tax for retirement pay normally are taxed in the countries who pay it.

The \"6 months rule\" is common to decide which country is counted as you are living there,
NOTE!  It can be very interesting if
1. there are agreements against double taxation,
2. RP is counted as main country
3. AND the income is from working abroad a part of the year.
Then it seems no country want to tax that work income... 

I know some use part of this to get REDUCED tax by working in Europe less than 6 months per year, and live in Thailand the rest of the year. Then  they PAY income tax on that European income, BUT they pay the LOWER Thai income tax percent.

[BingColin]

There are different double taxation agreements between each pair of countries, you need to look up the ones between your own home country and the one for the country you reside in. You can usually choose which country to pay your taxes, and choose the one that is most beneficial to you.

[drpeterb]

There are different double taxation agreements between each pair of countries, you need to look up the ones between your own home country and the one for the country you reside in. You can usually choose which country to pay your taxes, and choose the one that is most beneficial to you.

One reason you may not want to claim being a resident of the Phl (if you don't have to) is that Phl citizens who are residents of the Phl have to pay taxes on their world wide income.

Phl citizens who are not residents of the Phl only pay taxes on income earned in the Phl.

I know that the US taxes you on your WW income but my understanding is that the Philippines only taxes you on what income you make in the Philippines.

The key combination is resident citizens.  Residents of the Phl who are Phl citizens get taxed in the Phl on their world wide income.  Residents of the Phl who are not citizens get taxed in the Phl only on income earned in the Phl.

This is common in most countries.  Citizens who are residents of their country of citizenship are usually taxed on their world wide income.  Otherwise, people would just live in their country of citizenship but move their assets offshore.

The U.S. is one of the few countries that taxes the world wide income of their citizens even if they are not a resident of the U.S.

Apologies if this belongs in another thread, or is mentioned elsewhere....   I have copied the information in another topic to what seems a more natural home!

I was in conversation with an Australian who worked mostly in Europe and a British ex-pat, both retired and living in the Philippines as residents, but not citizens.  They were not paying tax on Europe/UK based pensions in Europe/UK as they were not resident there.  As a resident, but not citizen in the Philippines, they would not pay tax there either according the the above reference.

Is this too good to be true?  Any British in the Philippines able to confirm this?  Would make a huge difference to the timing of our plans not to lose some 30-40% in tax on UK pensions.  If anyone has details of a residency/taxation expert with knowledge of UK/Philippines regulations, please send a link.

I would love to be out there in 2 years, not 4 and a half!!!

Kind regards

Peter

[Art, just a re(tired) Fil-Am]

Why is there so much concern about taxes in the Philippines when one is retired, residing here and already receiving their pensions from their perspective home countries? The Philippines do not tax foreign retirement accounts, at least not those coming from the U.S.!
Only those who are still working and have a world wide income are the one's who should be concerned about being doubled taxed if the income is derived in the Philippines! 

[suzukig1]

...The Philippines do not tax foreign retirement accounts, at least not those coming from the U.S.!...

They would if you were a Phl citizen and a resident of the Phl (which was the specific situation brought up that started a lot of this) or probably at least have to file a Phl tax return.

[Art, just a re(tired) Fil-Am]

...The Philippines do not tax foreign retirement accounts, at least not those coming from the U.S.!...

They would if you were a Phl citizen and a resident of the Phl (which was the specific situation brought up that started a lot of this) or probably at least have to file a Phl tax return.

That was in another thread started by hitekcountry and now Filipino citizens are being mixed within this topic with foreign resident aliens, which is confusing to newbies who just joined on here let alone the UK's and Aussie's double taxation questions which are different to those coming from the U.S. and or from the Philippines for those who are dual citizens permanently living in the Philippines! It's just different for each nationality depending on each home country's perspective tax treaties/agreements with the Philippine government!