Choose the letter of the correct answer.

PrinciDles Classification of Individual Taxpayers

A
1. T° as Filipino citizen.

IL Born before January 17,1973 of Filipino mother who elects Philippine

Xcqui^“pMir^geSSiptya«er birth (naturalized) in acbatoa

a. I and III only

Philippine laws.
b. I, Hand III
a. I only
b. I and II only ❖ Answer; D

2. Individual taxpayers are

I. Natural persons with income derived within the territorial jurisdiction of a taxing authority.

II. Natural persons classified as citizens and aliens

a. I only c. I and II

b. II only d. None of the above

❖ Answer: C

3. Determine the correct classification of the following:

I. Manny, a Filipino businessman, went on a business trip abroad and stayed there "csr of the time
during the year.

II. Kyla, a Filipino professional singer, held a series of concerts in various countries around the
world during the current taxable year. She stayed abroad most of the time during the year.

ill. Efren, a Filipino “cue” artist went to Canada during the taxable year to train and participate in the
world cup of pool. He stayed there most of the time during the year

I NRC RC RC RC
II NRC NRC RC RC
III NRC NRC NRC RC

*♦* Answer: D

To be considered nonresident, the intention should be to stay abroad as an immW3^ or or employment”

on a permanent basis or whose employment thereat requires ,im °.oe,phyS,Ca^ Prese°f abroad most of thetime
[for one hundred eighty-th1^ aays (183) or more during the taxable year.

4. Statement 1: Overseas Filipino Workers duly registered as such with the Philippine Overseas
Employment Administration (POEA) with valid Overseas Employment Certificate (OEC) refer to Filipino
citizens employed in foreign countries and whose salaries are paid by employers abroad and are not
borne by entities or persons in the Philippines.

Statement 2: Filipino citizen Seafarers who receive compensation for services rendered abroad as a
member of the complement of a vessel engaged exclusively for international trade are considered
Overseas Filipino Workers provided they are duly registered as such with the Philippine Overseas
Employment Administration (POEA) with a valid Overseas Employment Certificate (OEC) with Seafarers
Identification Record Book (SIRB) or Seaman’s Book issued by the Maritime Industry Authority
(MARINA).

A. B. C. D.

Statement 1 True False True True

Statement 2 True False False True

❖ Answer: D

5. Bu-dhoy, a Mongolian national, arrived in the Philippines on January 1, 2018 to visit his Filipina
girlfriend. He planned to stay in the country until December 31,2020, by which time he would go back to
his legal wife and family in Mongolia. Bu-dhoy derived income during his stay here in the Philippines. For
2018 taxable year, Bu-dhoy shall be classified as a:

a. Resident alien

b. Non-resident alien engaged in trade or business in the Philippines

c. Non-resident alien not engaged in trade or business in the Philippines

d. Special alien employee

❖ Answer: A

£□ He was a resident of the Philippines for the entire 2018 taxable year.

6. Due to his expertise, Engr. Pedro D. Magiba (a freelancer) was hired by a foreign petroleum
contractor in Thailand to provide technical assistance for two months from February to March. He was
hired again for the months of June-July and October-December of the same taxable year. Engr. Pedro D.
Magiba is a:

a. Resident citizen

b. Nonresident citizen

c. Special Filipino employee

d. None of the above

❖ Answer: B ’
o If Pedro was hired only for two months (Feb. to March), he shall be classified as RC. If he was hired
only for four months (Feb. to March and June to July), he shall be classified as RC. However, he was
rehired again from October to December, hence, he shall be classified as NRC.

o Engr. D Magiba’s employment in Thailand requires him to be physically present abroad most of the
time during the taxable year [one hundred eighty-three (183) days or more].

Statement 1: The intention with regard to the length and nature of stay of an ali en 7' determines whether
he is a resident or nonresident.

Statement 2: A foreigner who has acquired residency in the Philippines shall only become a nonresident
when he actually departs with the intention of abandoning his residency j n the Philippines.

a. Only statement 1 is correct

b. Only statement 2 is correct

c. Both statements are correct

d. Both statements are incorrect

❖ Answer: C