How Can A Social Media Influencer Avoid The Risks Of Double Taxation On Income Received From Non-resident Foreign Companies Residing In A Country With Which The Philippines Has A Tax Treaty?

6 September 2021

 

The influencer should inform the non-resident payor that he is a resident of the Philippines and thus entitled to claim tax treaty benefits under the applicable tax treaty. If the non-resident payor requires the presentation of proof of residency in the Philippines, the influencer may obtain a Tax Residency Certificate from the International Tax Affairs Division of the BIR in accordance with Revenue Memorandum Order No. 043-20 (SyCipLaw’s Tax Department has prepared an article on the application for a Philippine Tax Residency Certificate in the international edition of its Tax Issues and Practical Solutions (T.I.P.S.) for the month of March, which may be accessed at https://syciplawresources.com/wp-content/uploads/2021/03/SyCipLaw-Tax-TIPS-International-March312021.pdf). 

 

RMC No. 97-2021 provides that if the influencer does not avail of the tax treaty benefits and his income from outside the Philippines was subjected to the regular tax rates, the influencer will not be allowed to claim foreign tax credits in excess of the amount of tax that was supposed to have been paid in the source state had the influencer invoked the tax treaty and proved his Philippine residency. 

 

Alien individuals and foreign corporations are not allowed to claim foreign tax credits for taxes paid in foreign countries because they are subject to Philippine income tax only on Philippine source income.