(5%)
Z is a Filipino immigrant living in the United States for more than 10 years. He is retired and he came back to the Philippines as a balikbayan. Every time he comes to the Philippines, he stays here for about a month. He regularly receives a pension from his former employer in the United States, amounting to US$1,000 a month. While in the Philippines, with his pension pay from his former employer, he purchased three condominium units in Makati which he is renting out for P15,000 a month each.
a) Does the US$1,000 pension become taxable because he is now residing in the Philippines? Reason briefly.
b) Is his purchase of the three condominium units subject to any tax? Reason briefly.
c) Will Z be liable to pay income tax on the P45,000 monthly income? Reason briefly.
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1 comment:
VI.
a.
No. Although Z is now residing in the Philippines, he is still considered a non-resident citizen because he still resides abroad as an immigrant. It must be noted that Z only stays in the Philippines for about a month every time he comes to the country. Therefore, as a non-resident citizen, Z can only be taxed on his income derived from sources within the Philippines, and since his pension is derived from sources abroad, such cannot be taxed.
b.
The purchase of the three condominium units are subject to transfer and excise taxes. Citizenship and residence are not taken into consideration in the payment of these taxes.
c.
Yes. A non-resident citizen is taxed on his income derived from sources within the country.
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