From Atty. Raymond Fortun: LEGAL ARTICLE TO TAX THE PACMAN The Pacman returns home a hero, then finds himself facing a formidable foe where his boxing skills have no use. What DOES the law say? The Bureau of Internal Revenue (BIR) levies income tax on taxable income from within and outside of the country on all citizens of the Philippines, even those working abroad. Of course, another country (e.g. the US) also has the right to tax people for incomes earned within its jurisdiction. In order to avoid the unfair situation where a Filipino earns income abroad and taxed there and is subsequently obligated to pay taxes for the SAME income as a Filipino citizen, the Philippines and the US have an income tax convention as early as 1976, providing for Relief from Double Taxation. So without having to bore you all with details, it is possible for a Filipino working abroad to be slapped with taxes by the US, but can use this fact as a Tax Credit in filing his income tax return in the Philippines. So what does the Pacman have to do to avoid being taxed twice? 1. He has to pay taxes in the US for income earned therein. 2. He has to secure the official IRS form that the taxes have been paid. A CERTIFICATION FROM TOP RANK BOXING JUST WONT DO. 3. He has to file an income tax return in the Philippines for the year covered. NOTE that the Pacman has other incomes aside from boxing, such as TV advertisements, product endorsements etc. 4. He has to submit the IRS tax-paid form and other tax-withheld forms to support his claim that he should only pay X amount of tax. 5. He should answer in a timely manner all letters sent by the BIR, including assessment notices. 6. If he does not agree with the assessment, he should then avail himself of legal remedies as provided under the Internal Revenue Code. If he did NOT do any of these, then the BIR has the right to impose the appropriate tax on him, and to run after his properties in the process. Again, it must be stated: DURA LEX, SED LEX. The law is harsh, but that is the law. If the Pacman violated the law, then he should be held answerable.
Posted on: Wed, 27 Nov 2013 12:00:10 +0000
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