MARY JOY P.

JUNIO, CPA Notre Dame of Midsayap College Midsayap, Cotabato

Individual taxpayers are natural persons with income derived within the territorial jurisdiction of a taxing authority. These are classified as citizens and aliens.

Income Tax of Individuals

Under Section 1, Article IV of the Philippine Constitution, a Filipino Citizen is he who is/has:

a. Born with father and/or mother as Filipino citizens b. Born before January 17, 1973 of Filipino mother who elects Philippine citizenship upon reaching the age of majority c. Acquired Philippine citizenship after birth in accordance with the Philippine laws.

An alien is a foreign-born person who is not qualified to acquire Philippine citizenship by birth or after birth.

1. Resident Citizen is a Filipino citizen who stayed permanently in the Philippines or stayed outside the Philippines for less than 183 days during the taxable year. 2. Nonresident Citizen is a Filipino citizen who stayed outside the Philippines for 183 days or more during the taxable year and has established proof to the BIR Commissioner of his definite intention to reside outside the Philippines on a permanent basis as an immigrant or employee.

Classifications of Aliens
1. Resident Aliens are persons who are not citizens of the Philippines but are residing within the Philippines including foreign individuals who have stayed in the Philippines for more than one year from date of arrival. 2. Nonresident Aliens are foreign individuals whose residences are not within the Philippines: a. Those engaged in trade or business within the Philippines (more than 180 days) b. Those not engaged in trade or business within the Philippines (180 days or less)

Special Taxpayers are those who are taxed with a 15% tax rate. This applies to compensation income derived within by aliens or Filipino citizen (not engaged in trade or business in the Philippines) with special employment contracts.