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Types of Income Tax Payers

This document classifies individual and corporate taxpayers for Philippine tax purposes. For individual taxpayers, it identifies four categories: 1) resident citizens, 2) non-resident citizens, 3) resident aliens, and 4) non-resident aliens. For corporate taxpayers, it identifies two categories: 1) domestic corporations, which are incorporated under Philippine law, and 2) foreign corporations, which can be resident or non-resident depending on whether they have a permanent establishment in the Philippines.

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50 views

Types of Income Tax Payers

This document classifies individual and corporate taxpayers for Philippine tax purposes. For individual taxpayers, it identifies four categories: 1) resident citizens, 2) non-resident citizens, 3) resident aliens, and 4) non-resident aliens. For corporate taxpayers, it identifies two categories: 1) domestic corporations, which are incorporated under Philippine law, and 2) foreign corporations, which can be resident or non-resident depending on whether they have a permanent establishment in the Philippines.

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Ace Fati-ig
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Ace A.

Fati-ig
BSOA2A

Classification of Individual Taxpayers.


1. Resident Citizens.
A citizen of the Philippines residing therein. Under the 1987 Constitution1, the
following are citizens of the Philippines.

 Those who are citizens of the Philippines at the time of the adoption of this
Constitution;
 Those whose fathers or mothers are citizens of the Philippines;
 Those born before January 17, 1973, of Filipino mothers, who elect Philippine
citizenship upon reaching the age of majority; and
 Those who are naturalized in accordance with the law.

2. Non-resident Citizen.
A citizen of the Philippines whose physical presence abroad is with a definite
intention to reside therein – to the satisfaction of the Commissioner of Internal
Revenue;
A citizen of the Philippines who leaves the Philippines during the taxable year to
reside abroad, either as an immigrant or for employment on a permanent basis. A good
example would be Overseas Contract Workers (OCW) or Overseas Filipino Workers
(OFW) who were issued an overseas employment permit. For purposes of income tax, a
seaman is considered an OCW2;
A citizen of the Philippines who works and derives income from abroad and
whose employment thereat requires him to be physically present abroad most of the
time during the taxable year. “Most of the time” means at least 183 days3;
A citizen who has been previously considered as a non-resident citizen and who
arrives in the Philippines at any time during the taxable year to reside permanently in
the Philippines shall likewise be treated as a non- resident citizen for the taxable
year with respect to his income derived from sources abroad until the date of his arrival in
the Philippines4. So, if the taxpayer, who is previously considered a non-resident citizen
arrived in the Philippines on July 1, 2016 with the intention of residing permanently in
the Philippines, he/she shall be considered a non-resident citizen for his income from
January 1 to June 30, 2016 (prior to his date of arrival) and a resident citizen for the rest
of the year.

3. Resident Alien.
An alien who lives in the Philippines with no definite intention as to his stay
(floating intention);
One who comes to the Philippines for a definite purpose which in its nature
would require an extended stay and to that end makes his home temporarily in the
Philippines;
An alien who has acquired a residence in the Philippines and retains his status as
such until he abandons the same and actually departs from the Philippines.

4. Nonresident Alien (NRA).


An alien who comes to the Philippines for a definite purpose which in its nature
may be promptly accomplished;
One who may either be a: (a) NRA engaged in a trade or business (NRAETB) in
the Philippines or (b) NRA not engaged in trade or business (NRANETB) in the
Philippines. A NRA who shall come to the Philippines and stay for an aggregate of more
than 180 days shall be deemed a NRAETB.

Classification of Corporate Taxpayers.


1. Domestic Corporation.
A domestic corporation is a corporation created and organized under the law of
the Philippines.
2. Foreign Corporation.
Foreign corporations are those which are created and organized under foreign laws:
Resident – having a permanent establishment/branch in the Philippines,
acquiring residency for tax purposes;
Non-resident – no permanent establishment in the Philippines; not regularly
engaged in trade or business in the Philippines.
References.
The Constitution of the Republic of the Philippines (1987), Sec. 1, Art. IV
Revenue Regulations (RR) No. 2-98
Revenue Regulations (RR) No. 1-79, Sec. 2
National Internal Revenue Code (1997), Section 22 (E) as amended
https://filipiknow.net/types-of-taxpayer-in-the-philippines/

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