Filipino Foreigner Work Tax Registration Policy and Guidelines

Filipino Foreigner Work Tax Registration Policy and Guidelines

The purpose of this order is to provide for the registration requirements of foreign individuals engaged in trade or business or for emoluments in the Philippines.

Background

The Philippine Department of Labor and Employment (DOLE), the Department of Justice (DOJ), the Bureau of Immigration (BI) and the Internal Revenue Service (BIR) have signed a joint guideline on the issuance of work and employment permits to foreign nationals.

The "Joint Guidelines" clarify and harmonize the existing provisions regarding the issuance of appropriate permits to all foreign nationals who intend to work, conduct business activities or provide services in the Philippines.

Under the new guidelines, foreign nationals must obtain a Special Work Permit (SWP) from the Bureau of Immigration (BI) to begin work, or apply for a Special Temporary Professional Permit (STP) from the Professional Regulatory Commission (PRC) of the Philippines. The Special Work Permit (SWP) allows foreign nationals to work with a tourist visa (9A) while the contract is valid for three months and can be extended for three months after expiration, for a total of six months of the Special Work Permit (SWP).

Foreigners who are engaged in long-term (more than six months) paid employment should apply to the Department of Labor (DOLE) for an Alien Employment Certificate (AEP), and while awaiting approval, foreign citizens should apply for a Temporary Work Permit (pwp) from the Immigration Service (BI).

The Alien Employment Permit (AEP) is one of the requirements for foreign citizens to engage in paid work in the Philippines. Subsequent work visas (9G) must be issued by the Immigration Bureau (BI) before they can legally work in the Philippines. Some foreign nationals who are specifically exempt from the Alien Employment Certificate (AEP) must obtain a Department of Labor (DOLE) exemption certificate.

Other agencies that can also issue work permits to foreign citizens are the Department of Geology, Environment and Natural Resources (DENR) and the Department of Justice (DOJ).

B. Definition of name

Alien Employment Permit (AEP)-A permit issued by the Department of Labor (DOLE) to a foreign national pursuant to an employment agreement between the foreign national and a Filipino company. Permission for foreigners to work in the Philippines is granted after it is determined that the Filipino is incompetent.

Temporary Work Permit (PWP) -A temporary work permit approved by the Bureau of Immigration (BI) that allows foreign nationals to work legally while awaiting approval for an Alien Employment Permit (AEP) and 9G.

Special Temporary Professional Permit (STP)-is a permit issued by the Professional Regulatory Commission to a foreign professional to practice in the Philippines for a limited period of time, subject to legal restrictions.

Special Work Permit (SWP)-means a Special Work Permit (SWP) by which Immigration BI allows a foreigner to work.

C. Tax registration

Foreigners who intend to work, trade or do business in the Philippines must apply for a tax card (TIN) in accordance with the regulations. They must also apply for a new tax card (TIN) now if they have not applied before.

A new taxpayer identification number (TIN) must be applied for after the issuance of this rule and must pay their monthly income withholding tax.

For the list of occupations listed in the table below, a Taxpayer Identification Number (TIN) should be requested at the Department of Revenue, No. 39, Quezon City:

A. professional athletes, coaches, trainers;

B. excellent experts;

C. Artists, performers and their staff, performing for a fee, shall comply with the performance approval requirements of the relevant institutions;

D. Equipment and service suppliers are mainly installation, commissioning and after-sales service, and do not have any income;

E. Exploration searchers licensed by government agencies;

F. Film or television crews permitted by regulatory authorities, including filming in the Philippines;

G. Journalism practitioners based in the Philippines;

H. Interns in government agencies, state-owned companies and private private companies;

I. To perform academic work in schools, educational and research institutions, government agencies and other entities, whether remunerated or not;

J. Religious preachers and priests;

K. Business talents;

I. Cooking chefs;

M. Professional and technical personnel;

N. consultant or expert.

C. Foreigners holding a work visa (9G)

Foreign citizens who have been granted an AEP or work visa (9G) should apply for a Taxpayer Identification Number (TIN) by their employer to the Inland Revenue Department, and the registered foreign citizens should renew their registration with the Inland Revenue Department (BIR) in case of termination of employment.

D. Tax treaties

According to the relevant Philippine tax treaty, foreign citizens who meet 43 valid tax treaties can enjoy preferential tax rates.

The taxation of foreign nationals specifically engaged in trade or business or working in the Philippines will be subject to the provisions of the applicable tax treaty. In addition, the right to tax treaty relief depends on the specific circumstances of the foreign applicant.

E. Effectiveness

This order shall take effect immediately.

Philippine National Tax Service

Release date: May 31, 2019