June 16, 2005

BIR RULING [DA-261-05]

Rev. Regs. No. 5-01

Office of the President

Malacañang Palace
Manila

Attention: Secretary Ma. Lourdes P. Varona

Correspondence Secretary

Gentlemen :

This refers to the e-mailed letter of Mr. Benjamin G. Edic to your O ce dated
February 15, 2005 indorsed to this O ce on February 24, 2005, inquiring if Overseas
Filipino Workers (OFWs) are exempt from filing income tax returns.
In reply, please be informed that under Section 23(C) of the Tax Code of 1997, an
OFW is taxable only on income from sources within the Philippines. Pursuant to Section
51(A)(2)(d) of the same Code, an individual who is exempt from income tax is not
required to le an income tax return. Nevertheless, pursuant to Section 51(A)(3) of the
Tax Code of 1997, any individual not required to le a return may be required to le an
information return. Accordingly, Revenue Memorandum Order No. 30-99 required OFWs
to make information returns beginning March 17, 1999. This requirement, however, was
lifted by Revenue Regulations No. 5-01 Re: Revoking the Requirement for Non-Resident
Citizens, Overseas Contract Workers (OCWs) and Seamen to File Information Returns
on Income Derived from Sources Outside the Philippines, viz —
"SEC. 2. FILING OF INFORMATION RETURNS (BIR FORM 1701C OR BIR
FORM 1703) NO LONGER REQUIRED. — Non-resident citizens who are exempt
from tax with respect to income derived from sources outside the Philippines in
accordance with Section 23(B) and (C), in relation to Section 22(E) and Section
51(A)(2)(d) and (A)(3) of the Tax Code of 1997, but who are nevertheless
mandated to le information returns (BIR Form 1701C or the new computerized
BIR Form 1703) pursuant to RMO 30-99 and RR 9-99, shall no longer be required
to le the same on their income derived from sources outside the Philippines
beginning taxable year 2001."
In view of the foregoing, beginning taxable year 2001, OFWs are no longer
required to le either income or information returns only on income from sources
without the Philippines (i.e., income from abroad).

Very truly yours,

(SGD.) JOSE MARIO C. BUÑAG

Deputy Commissioner
Legal & Inspection Group

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