but how come Congressman Manny Pacquiao who is a Professional Boxer is being chased by the BIR for his earnings which he made abroad. What I know is that Professional Boxers are not considered OFWs.
Also my understanding is that Professional Basketball Players are in the same category as a Professional Boxer.
http://www.spot.ph/newsfeatures/5063...nt-tax-records
Pacquiao hit by BIR charges for alleged failure to present tax records
Published: Mar 7, 2012 - 5:51pm
ABS-CBNNews.com reports that the Bureau of Internal Revenue (BIR) has filed charges against Sarangani Representative and boxer Manny Pacquiao for violating Article 266*** of the National Internal Revenue Code (NIRC). According to BIR regional director Rozil Lozares said they have "long asked Pacquiao to submit his tax records so the BIR can check if he has any tax deficiencies." They sent him summons on January 24.
According to the report, "the BIR wants to investigate 33 tax records, including Pacquiao’s annual income tax return in 2010, his book of accounts, list of assets, as well as
his earnings from his fights against Antonio Margarito and Joshua Clottey." They also asked Pacquiao to submit 29 copies of his contracts for various endorsements. Pacquiao failed to bring the necessary documents to the BIR office on February 7. As such, Lozares said they were "forced to file a criminal case against Pacquiao." The case is now with the Office of the City Prosecutor in Koronadal.
The report noted that Pacquiao has "denied any wrongdoing." The report explained that if he is found guilty he will be "punished by a fine of not less than P5,000 but not more than P10,000 and suffer imprisonment of not less than one year but not more than two years."
http://www.sunstar.com.ph/bacolod/bu...ttances-144953
BIR issues taxation policy on OFW earnings, remittances
Tuesday, March 15, 2011
OVERSEAS Filipino workers (OFWs) who derive earnings from business activities or properties in the country will be subject to taxation as per the latest regulations from the Bureau of Internal Revenue (BIR).
BIR Revenue Regulations (RR) 1-2011 stated that an OFW may be subjected to the 12 percent value added tax if in the course of his trade or business, he sells, barters, exchanges or leases goods or properties or imports goods into the Philippines.
“However, if gross annual sales and/or receipts do not exceed P1.5-million and he opted not to register as a VAT taxpayer, he shall be liable to pay instead three percent tax of his gross quarterly sales or receipts," it said.
Section 3 of the RR added that while an OFW is exempt from the 7.5% final tax on interest income from a depository bank under the expanded foreign currency deposit system upon presentation of proof of non-residency like a valid overseas employment certificate (OEC) or a seaman's book, “if the account is jointly in the name of an OFW and a spouse or dependent living in the Philippines, 50% of the interest income from such bank deposit will be treated as exempt while the other 50% shall be subject to the final withholding tax of 7.5%.”
The BIR will also collect a 10% final tax on cash or property dividends; 5-10% final tax on net capital gains realized on the sale, barter, exchange or other disposition of shares of stocks in a domestic corporation except those shares sold or disposed of through the stock exchange; 6% tax on capital gains from the sale or disposition of real property in the Philippines classified as capital assets based on gross selling price or current fair market value; and final tax on interest income from long-term deposits or investments in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investments.
The remittances of all OFWs, upon showing of the OEC or valid Overseas Workers Welfare Administration (OWWA) membership certificate by the OFW beneficiary or recipient, shall be exempted from the payment of the documentary stamp tax (DST).
But in addition to the original copy, "a duplicate or a certified true copy of the valid proof of entitlement shall be secured, which shall be held and used by the beneficiary in the availment of the DST exemption.”
The BIR, meanwhile, has launched its tax campaign to jumpstart an all-out drive to collect the bulk of the P940-billion goal this taxable year, with focus on the Large Taxpayers Service (LTS), which is considered as the Bureau’s prime revenue-raising office.
LTS is tasked to collect at least 60% or P457.32-B of the entire tax agency’s collection goal. “The goal allocation for the LTS may look gargantuan but it is doable,” BIR said as it urged the support of partner stakeholders to flush out unreported taxes.
“With taxpayers slowly realizing the need for them to pay the right amount of taxes and the improved enforcement capability of our field auditors, the LTS will play a very significant part in the BIR’s attainment of its collection target for taxable year 2011,” it added. (CGC)
http://www.sunstar.com.ph/bacolod/bu...ttances-144953
Tax Treatment of Income Earnings and Money Remittances of an OFW
June 14th, 2012 Philippine Business Online Team
Revenue Regulations 1-2011 clarifies the earnings of an Overseas Filipino Worker (OFW) that is subject to income taxes. This revenue regulation was released on February 24, 2011, with the objective to identify who are considered as an OFW for purposes of taxation and the tax treatment of their earned income.
To recall, Section 23 of the National Internal Revenue Code (NIRC) lays-down the general principles of income taxation in the Philippines. The tax code indicates and I quote:
A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines;
A nonresident citizen is taxable only on income derived from sources within the Philippines;
An individual citizen of the Philippines who is working and deriving income from abroad as an overseas contract worker is taxable only on income derived from sources within the Philippines: Provided, That a seaman who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of the complement of a vessel engaged exclusively in international trade shall be treated as an overseas contract worker;
An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines;
A domestic corporation is taxable on all income derived from sources within and without the Philippines; and
A foreign corporation, whether engaged or not in trade or business in the Philippines, is taxable only on income derived from sources within the Philippines.
It is from this provision of the tax code that the implementing rules and regulations of taxability of OFWs is based.
On the perspective of the Bureau of Internal Revenue (BIR), OFWs refers to Philippine Citizens employed in foreign countries and who are physically present in a that foreign country to perform their jobs and are paid by an employer abroad and that such employer is not an entity or person in the Philippines. Another requirement for a person to be classified as an OFW is for that individual to be registered as with the Philippine Overseas Employment Administration (POEA) with a valide Overseas Employement Certificate (OEC). Filipino Seafarers receiving compensation for services of a vessel engaged exclusively in international trade must also have a valid Seafarers Identification Record Book (SIRB) or Seaman’s Book issued by MARINA.
Taxability of Income
The general rule for an OFW’s income arising from his overseas employment, is that such income exempt from taxes. However, there are excemptions to this rule. The exemption is that if an OFW has income from business activities or income from properties in the Philippines, such income is subject to applicable taxes. Some of which are as follows (refer to RR 1-2011 for the complete list):
Regular income – subject to 5-32% income tax, based on the graduated income tax rates for individuals.
Sales tax – subject to 12% VAT.
Passive income:
20% on interest income from bank deposits
6% capital gains tax on sale of real properties
Originally Posted by lapukman
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