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TAX! Do you pay any to RP?


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mikejwoodnz
my gut on this is that you have pretty much no chance of getting a tax demand from the rp ......now if you want to give them some is another matter.....but are you talking about untaxed profits?? ...because they can only be taxed once.

 

well i think they will get the tax... 12% VAT and on bank accts 20% but besides that i dont think so

 

OK the 12% VAT is non reported (that is it does not leave an audit trail to the spender) but about the bank acct 20% - is this on interest bearing accounts ? - if so does the bank then require you to have a Phil tax identity and number ?

- if the money is simply in a cash account - no interest - then may I assume this would keep one under the radar ? :rolleyes:

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poby

I found something interesting:

 

Section 45(a) of the National Internal Revenue Code is hereby amended to read as follows:

 

"Sec. 45. Individual returns.

Edited by poby
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JohninCebu
Do you think there is a way around this?

 

If there is, it would be foolish for anyone to post it in a public message board.

err, I thought that was the whole point of having sites like this. There sure aint no illegal way so if you post about a legal one, what's the problem?

 

My income is far higher than personal allowances and in the UK pension providers have to deduct tax. Is it different in the UK and Australia? Whether you submit a tax return or not, tax is deducted.

Edited by johnrainey
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poby
My income is far higher than personal allowances and in the UK pension providers have to deduct tax. Is it different in the UK and Australia? Whether you submit a tax return or not, tax is deducted.

 

In Australia, it all depends from where your income is derived. Virtually all my income is from the stock market and unit trusts which invest in the stock market. Non residents do not pay capital gains tax on assets that are not "taxable australian property" Shares in publically listed companies apparently are not "taxable australian property" and so no capital gains tax can be applied. Foreign income is similarly exempt. Other income that is Australian sourced such as dividends are taxed at 30% BUT if fully franked, no further tax is applied. Bank interest is taxed at a final rate of 10%.

 

In my particular case, last financial year I had a gross income of $96,000 however if I had been a non resident, I would only have paid tax on $2000 of that, a total tax bill of around $600 for the year.

 

I'm seeing an accountant tomorrow to confirm my conclusions. If I'm correct, it's costing me a fortune in tax by not living in RP!

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twostrokes
I found something interesting:

 

Section 45(a) of the National Internal Revenue Code is hereby amended to read as follows:

 

"Sec. 45. Individual returns.

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  • 4 months later...

Ok to rekindle this TAX thread? Please offer your best input on this scenario.

 

I am currently set to be based in the PI working for a European Company ( with regional office in Singapore.) I will be helping facilitate business in PI, HK and other SE Asian countries.

 

I am married to a Filipina.

I am a US citizen currenly paying US income tax

Will be changing companies and moving to CEBU permanently

 

Whats the best way for me to minimize my TAX burden?

Said company is now hiring a consulting company so I can be "legally" be based there. The consulting company will set up my work visa; and officially on paper I will be working for the consulting company. I am concerned the consulting company will deduct Income tax from my wages etc.. for reporting to BIR

 

I would rather my new company not do anything.. and let me come in on my Balikbayan status get .. a 13(a) visa.. and allow me to take care of my own taxes....whatever I choose to report to PI authorities. And how does the PI hold taxes accountable.. I dont remember ever having to show proof of paying taxes before when getting my visa renewed or leaving the country?

 

Does my new Euro company have to jump through the hoops to set me up in local based company (the consulting company) for me to live and work in the PI?

 

Any insight or suggestions would be appreciated.

 

Best

Edited by samatm
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For Americans, the situation is quite simple.

You declare income to the US authorities, no matter where you are or where it is earned.

 

If you live overseas, I gather there are a number of tax concessions, but someone better versed in, and more up to date with, US laws can probably comment on this.

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For Americans, the situation is quite simple.

You declare income to the US authorities, no matter where you are or where it is earned.

 

If you live overseas, I gather there are a number of tax concessions, but someone better versed in, and more up to date with, US laws can probably comment on this.

 

 

 

Yes, but doesnt the PI want a cut of my income earned? What I'm worried about now is that the "shell company" will report me as an employee and report my income to the BIR so now I'm double taxed. I can only take the US Foreign income earned abroad deduction If I spend over 330 calendar days outside of the US in a given year... That may be hard to do and this year there is no way. :) .

 

I guess my question is: by being married to a Filipina...can't I legally work in the PI ? Does my employer need go through the steps to set me up in a "Philippine Company " in order for me to be based here in the PI?

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If you are married to a Philippine citizen you can apply for a 13(a) permanent resident visa which allows you to work.

 

Mike in Cebu

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Ok to rekindle this TAX thread? Please offer your best input on this scenario.

 

I am currently set to be based in the PI working for a European Company ( with regional office in Singapore.) I will be helping facilitate business in PI, HK and other SE Asian countries.

 

I am married to a Filipina.

I am a US citizen currenly paying US income tax

Will be changing companies and moving to CEBU permanently

 

Whats the best way for me to minimize my TAX burden?

Said company is now hiring a consulting company so I can be "legally" be based there. The consulting company will set up my work visa; and officially on paper I will be working for the consulting company. I am concerned the consulting company will deduct Income tax from my wages etc.. for reporting to BIR

 

I would rather my new company not do anything.. and let me come in on my Balikbayan status get .. a 13(a) visa.. and allow me to take care of my own taxes....whatever I choose to report to PI authorities. And how does the PI hold taxes accountable.. I dont remember ever having to show proof of paying taxes before when getting my visa renewed or leaving the country?

 

Does my new Euro company have to jump through the hoops to set me up in local based company (the consulting company) for me to live and work in the PI?

 

Any insight or suggestions would be appreciated.

 

Best

Get a good accountant I'd suggest.

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In Australia, it all depends from where your income is derived. Virtually all my income is from the stock market and unit trusts which invest in the stock market. Non residents do not pay capital gains tax on assets that are not "taxable australian property" Shares in publically listed companies apparently are not "taxable australian property" and so no capital gains tax can be applied. Foreign income is similarly exempt. Other income that is Australian sourced such as dividends are taxed at 30% BUT if fully franked, no further tax is applied. Bank interest is taxed at a final rate of 10%.

 

In my particular case, last financial year I had a gross income of $96,000 however if I had been a non resident, I would only have paid tax on $2000 of that, a total tax bill of around $600 for the year.

 

I'm seeing an accountant tomorrow to confirm my conclusions. If I'm correct, it's costing me a fortune in tax by not living in RP!

 

So what was the answer from your accountant?

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Not real sure about what you are doing with the "shell" company, if it is a Philippine company or not, but I kno I worked for Ford Aerospace there for nearly 6 years and never reported or paid a dime of tax to the BIR....I was also exempt to $85k for US taxes....and since I wasn't making that much, was really tax free....I did have to file each year....If you are going to make more than that, you can also (if your wife is not a US citizen) take half your income and list it as hers as a non-resident alien (living outside the country) which would make half your income go away, then your other half would fall under the $85K rule...if you are making more than 170k, I want your job!!!!!!!!!!!

jim

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Thanks for the info and it is comforting. I just have to see that the consulting company being used to bring me into the PI doesn't report my earnings etc. Were you a direct employee of ford aerospace? Were you on a working visa like 13(a) . ?

 

I would love that job tooo.... Unfortunately even the 85k exclusion nowhere near applies to me... BUT as I may well spend more than 30 days out of the year in the USA, I dont believe I will be able to use that exclusion especially this year.

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So what was the answer from your accountant?

 

He didn't tell me anything I didn't know already. My conclusions were 100% correct.

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Thanks for the info and it is comforting. I just have to see that the consulting company being used to bring me into the PI doesn't report my earnings etc. Were you a direct employee of ford aerospace? Were you on a working visa like 13(a) . ?

 

I would love that job tooo.... Unfortunately even the 85k exclusion nowhere near applies to me... BUT as I may well spend more than 30 days out of the year in the USA, I dont believe I will be able to use that exclusion especially this year.

 

 

To be real honest, I don't remember what type visa I had...And, yes I was a direct employee. Ford had a contract with the Air Force to run the Crow Valley Bombing Range. So because it was a gov't contract, there were a lot of things that placed us in the same catagory as US Military...But I do remember that after we shut down and the contract ended, we had X- amount of time to get out visas changed to whatever we were eligable for or get out of the country. Hard to believe that it has been 20 years since I started that job....memory is fading on details...like type of visa....

Jim

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