Individual Taxpayers

Question 1

What are the 5 classifications of individual taxpayers under the Tax Code?

Answer 1

1. Resident Citizen
2. Non-Resident Citizen
3. Resident Alien
4. Non-resident Alien Engaged in Trade or Business
5. Non-resident Alien Not Engaged in Trade or Business

Question 2

Who are considered as citizens of the Philippines?

Question 3

Who are considered as nonresident citizens?

Answer 3

• Established, to the satisfaction of the CIR, their physical presence abroad with a definite intention to reside therein
  
  • as immigrant
  • for employment on a permanent basis
• Work that requires physical presence abroad most of the time (at least an aggregate of 183 days during the taxable year)
• Oversear Contract Workers (OFWs with contract)
• Seamen
  
  • member of a complement
  • exclusively for international shipping

not all OFWs are OCWs

Question 4

Who are considered as resident aliens?

Answer 4

• Those who came to the Philippines with no definite intention as to stay
• Those with a definite intention, making the Philippines as temporary home

Question 5

Who are considered as NRA-ETB?

Answer 5

• engaged in trade or business and/or profession
• stayed for an aggregate of more than 180 days during the taxable year (deemed as NRA-ETB)

Question 6

Who are considered as NRA-NETB?

Answer 6

• not engaged in trade or business and/or profession in the Philippines
• stayed for an aggregate of not more than 180 days during the taxable year

Question 7

Which among the individual taxpayers are taxable on their income derived within and outside the Philippines?

Answer 7

Resident Citizens

The other taxpayers are taxable on their income derived within the Philippines only.

Question 8

What tax is applicable to NRA-NETB?

Answer 8

Generally, NRA-NETBs are subject to 25% final withholding tax.