Individuals
• CLASCLASSIFICATION OF INDIVIDUAL TAXPAYERS
Resident Citizen (RC)
Nonresident Citizen (NRC)
Resident Alien (RA)
Non-resident Allen (NRA)
a) Engaged in trade or business (ETB))
b) Not engaged in trade or business (NETB)
NONRESIDENT CITIZEN
• The following are considered nonresident citizens under Sec. 22 (E) of
the Tax Code:
1. A citizen of the Philippines who establishes to the satisfaction of the
Commissioner of the fact of his physical presence abroad with a
definite intention to reside therein.
2. A citizen of the Philippines who leaves during the taxable year to
reside abroad, either as an immigrant or for employment on a
permanent basis;
3. A citizen of the Philippines who works and derives income from abroad and whose
employment thereat requires him to be physically present abroad most of the time
[for one hundred eighty-three days [(183) or more] during the taxable year;
4. A citizen who has been previously considered as nonresident citizen who arrives in
the Philippines at any time during the taxable year to reside permanently in the
Philippines shall be considered a nonresident citizen for the taxable year in which he
arrives in the Philippines with respect to income derived from sources abroad until the
date of his arrival in the Philippines.
Citizens not classified under this category are considered Resident Citizens.
OVERSEAS CONTRACT WORKER
• Overseas Contract Workers (OCW's) refer to Filipino citizens
employed in foreign Countries, commonly referred to as
Overseas Filipino Workers (OFW), who are physically present in a
foreign country as a consequence of their employment thereat.
• Their salaries and wages are paid by an employer abroad and is not
borne by any entity or person in the Philippines.
• Their salaries and wages are paid by an employer abroad and is
• To be considered as an OCW or OFW, they must be duly
registered as auth the Philippine Overseas Employment
Administration (POEA) with a valid Overseas Employment
Certificate (OEC). (RR No. 1-2011)
• A seaman who is a citizen of the Philippines and who receives
compensation for services rendered abroad as a member of the
complement of a vessel engaged exclusively in international
trade shall be treated as an overseas contract worker, (Section
23 (C), RA 8424)
• In order for seafarers or seamen to be considered as OCW's or
OFW's they must be duly registered as such with the Philippine
Overseas Employment Administration (POEA) with a valid
Overseas Employment Certificate (OEC) with a valid Seafarer's
Identification Record Book (SIRB) or Seaman's Book issued by
the Maritime Industry Authority (MARINA).
• For taxation purposes, OCWs are classified as nonresident
citizens
Resident Alien
• Means an individual whose residence is within the Philippines and
who is not a citizen thereof (Section 22 (F) RA 8424 –Tax Code)
The following are considered as resident alien:
1. An alien actually present in the Philippines who is not a mere
transient. A person comes to the Philippines for definite purpose
which in its nature many be promptly accomplished is a transient.
2. An alien who comes to the Philippines for a definite purpose which,
by its nature, would require an extended stay making his home
temporarily the Philippines
3. An alien who shall come to the Philippines with no definite intention
as to his stay.
An alien who has acquired residence in the Philippines retains his
status as a resident until he abandons the same and actually depart
from the Philippines.
Non-Resident Alien
1. Engaged in trade or business (Section 25 (A) RA 8424)- Tax Code
An alien individual actually engaged in trade or business in the
Philippines and
An alien who comes in the Philippines for an aggregate period of more
than 180 days during the calendar year during calendar year shall be
deemed a non resident alien doing business in the Philippines
2. Not engaged in trade or business-those NRAs not included above
Source(s) of Taxable Income
Tax Payer Taxable Sources(S)
RC Within and without the
Philippines
NRC RA OCW NRA-ETB NRA- Within the Philippines only
NETB
TYPES OF INCOME TAXES:
1 Basic Income Tax on regular or ordinary income
2 Final Withholding Tax on Passive Income derived from
Philippine sources
3. Capital Gains Tax on Sale of Shares of Stock of unlisted
domestic corporations
4. Capital Gains Tax on Sale of Real Properties located in the
Philippines
The total amount of the taxes above is known as "Total Income
Tax Expense"
