Professional Documents
Culture Documents
Sidel Ruling PDF
Sidel Ruling PDF
Gentlemen :
This refers to your letter dated March 2, 2010 requesting in behalf of your
client, SIDEL SALES AND CONVEYOR INDUSTRIES PHILIPPINES, INC.,
for the confirmation of your opinion that the compensation income of Sidel's Field
Service Engineers derived in relation to their assignment abroad shall not be
subject to Philippine income tax, and consequently from withholding tax, if their
employment requires them to be present in that foreign country most of the time
during the taxable year, i.e., they stay there for at least one hundred eighty-three
(183) days. CTHDcE
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importation and exportation of various conveyor parts and spare parts, assembly,
sales, marketing, distribution, design, commissioning or installation of production
assembly line machinery or products, including but not limited to high speed
conveyors and assembly lines used in the foods and beverage industries and other
similar establishments which require the use of a production assembly line, as well
as other products related to such type of machineries or products."
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Pakistan 9-Feb-08 3-Apr-08 55
Indonesia 16-Apr-08 19-Apr-08 4
New Zealand 21-Apr-08 28-Apr-08 8
Pakistan 7-May-08 18-Sep-08 135
India 5-Nov-08 21-Dec-08 47
–––
Total 257
===
Allanger Arellano Cayanan (2008 Travel)
Country From Until Days
Indonesia 29-Jan-08 26-Feb-08 29
India 9-Mar-08 30-Apr-08 53
Thailand 20-May-08 26-May-08 7
India/ 31-May-08 25-Jun-08 26
Indonesia
Vietnam 15-Jul-08 5-Aug-08 22
Indonesia 6-Sep-08 1-Oct-08 26
France 15-Nov-08 15-Dec-08 31
–––
Total 194
===
Jonathan DJ. Almirañez (2008 Travel)
Country From Until Days
Thailand 7-Jan-08 29-Feb-08 54
Pakistan 15-Mar-08 6-Aug-08 145
Cambodia 1-Oct-08 15-Nov-08 46
India 9-Dec-08 22-Dec-08 14
–––
Total 259
===
However, these Field Service Engineers who are working overseas are still
in the Philippine office's payroll. THEDcS
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3) Certified Machine Copy of 2009 General Information Sheet;
In reply, please be informed that Section 22 (E) of the Tax Code of 1997, as
amended, provides:
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taxable year.
In the case of the herein listed personnel, they are employed as a full-time
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staff in SIDEL and the assignment to the SIDEL's operations in countries like
China, Thailand, Malaysia, Pakistan, Australia, or as management may decide, is
part of the employee's appointment. It is clear from the contract as Field Service
Engineers that the salary shall be paid by SIDEL, whether while in the Philippines
or while on overseas assignment. Hence, their temporary assignment abroad does
not make them employees of the companies for which they render their services.
Hence, SIDEL, the employer corporation shall withhold income tax on said
compensation income pursuant to Section 79 (A) of the Tax Code of 1997, as
implemented by Revenue Regulations (RR) No. 2-98, as amended.
In view of the foregoing, this Office is of the opinion and hereby holds that
SIDEL's employees assigned to render the company's services abroad, do not
qualify as "non-resident citizens" under the definitions laid down under Section 22
(E) of the Tax Code of 1997, as amended. They will be treated as resident citizens
for income tax purposes. As such, their compensation income shall be subject to
creditable withholding tax under Section 2.78.1 of RR 2-98, as amended.
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