Online Work

Tariq,

I am living in Angeles City and I work digitally as a Content Consultant and Content Writer, Any money you earn from online work, where the client is outside of the Philippines is NOT required to be reported to the Philippine Bureau of Internal Revenue (BIR) for tax purposes.

On the downside, you will still have to report it to the IRS. Uncle Sam ALWAYS gets his cut first! No matter where you live or work. On the plus side, there are two income exemptions you may be able to claim when living in the Philippines that COULD exempt the first $106 or $107,000 you earn each year while living outside the U.S.

Carl

>Tariq
Check rather recent topic about this subject from BIR.  And I believe it was a separate topic about law breaking.

The Philippines has a special law about earning at internet for everyone.
Although deals between countries can decide which country to be TAXED in.

And you need to check if you need work permit.  Probably yes.

carlisom78 wrote:

Tariq,
I am living in Angeles City and I work digitally as a Content Consultant and Content Writer, Any money you earn from online work, where the client is outside of the Philippines is NOT required to be reported to the Philippine Bureau of Internal Revenue (BIR) for tax purposes.

On the downside, you will still have to report it to the IRS. Uncle Sam ALWAYS gets his cut first! No matter where you live or work. On the plus side, there are two income exemptions you may be able to claim when living in the Philippines that COULD exempt the first $106 or $107,000 you earn each year while living outside the U.S.

Carl

Partly WRONG.  If not Americans have an exception.

It s an OTHER question if it will be TAXED or not in the Philippines.

Phils government people say even tourists have to have work permit to work in Phils through internet.   And volontary workers need wiork permit.  So why wouldnt work permit be needed by this ??    (I mean IF it isnt solved by a work allowing Visa anyway.)

New area and maybe open to interpretation / clarification by the BIR for digital nomads since their main focus appears to be on streamers, influencers, online sellers and the like.

"The Bureau of Internal Revenue (BIR) in a memo released on Monday, August 16, made it clear that foreigners creating content in the Philippines will be taxed.

“For resident aliens, any income derived from Philippine-based contents shall generally be taxable,” the tax agency said in BIR Revenue Memorandum Circular No. 97-2021, which can be viewed here.

The BIR is set to conduct a "full-blown tax investigation" against social media influencers, as the Philippine government looks for more cash amid the coronavirus pandemic."

https://www.rappler.com/technology/soci … evenue-tax

"Are they required to register with the BIR?

Yes. Based on the provisions of Section 236 of the Tax Code, every person subject to tax shall register once with the appropriate revenue district officer:

    Within 10 days from date of employment, or
    On or before the commencement of business, or
    Before payment of any tax due, or
    Upon filing of a return, statement, or declaration as required in the Tax Code"

https://www.rappler.com/business/ask-th … hilippines

Coach,

I specifically asked an Expat tax prep expert the question about if I had to report income earned through an online business while I was living in the Philippines, from business conducted with clients headquartered outside the Philippines. I asked her before I left the U.S.

I was told that income earned from working online with customers outside the Philippines is NOT required to be reported to the Philippine BIR. So Yes, the U.S. does have a tax treaty with the Philippines. U.S. citizens are required to Pay U.S. Income taxes wherever they live in the world. BUT, In the case of the Philippines, we are covered by a specific Tax treaty agreement to avoid us being required to pay taxes on the same income twice, once in the U.S. and once in the Philippines.

This is all from Fact-based research, not guesswork. I'm not offering my opinion. Just facts.

carlisom78 wrote:

Coach,

I specifically asked an Expat tax prep expert the question about if I had to report income earned through an online business while I was living in the Philippines, from business conducted with clients headquartered outside the Philippines. I asked her before I left the U.S.

I was told that income earned from working online with customers outside the Philippines is NOT required to be reported to the Philippine BIR. So Yes, the U.S. does have a tax treaty with the Philippines. U.S. citizens are required to Pay U.S. Income taxes wherever they live in the world. BUT, In the case of the Philippines, we are covered by a specific Tax treaty agreement to avoid us being required to pay taxes on the same income twice, once in the U.S. and once in the Philippines.

This is all from Fact-based research, not guesswork. I'm not offering my opinion. Just facts.

Makes sense given the treaty and this is the same as when you work for a local entity here.  Any Philippine income tax you already pay can be claimed as against the tax liability on your Federal return.

>  Tyrion Lannister
Yes. I wrote about that somewheree else a while ago.
ALL people earning by internet have to report to BIR.
BIR didnt talk about work permits, I suppouse they dont bother about that, but other departments do 

carlisom78 wrote:

Coach,

I specifically asked an Expat tax prep expert the question about if I had to report income earned through an online business while I was living in the Philippines, from business conducted with clients headquartered outside the Philippines. I asked her before I left the U.S.

I was told that income earned from working online with customers outside the Philippines is NOT required to be reported to the Philippine BIR. So Yes, the U.S. does have a tax treaty with the Philippines. U.S. citizens are required to Pay U.S. Income taxes wherever they live in the world. BUT, In the case of the Philippines, we are covered by a specific Tax treaty agreement to avoid us being required to pay taxes on the same income twice, once in the U.S. and once in the Philippines.

This is all from Fact-based research, not guesswork. I'm not offering my opinion. Just facts.

Well. I believe you mix up two diferent things:
1. Where need to REPORT.
2. Where need to pay TAX  (if not under tax free amount.)

They can be two different by deals between countries.

I know Americans have some exceptions from paying tax at incomes. Its somethin abput uner or iver 10 000 per year. I dodnt bother to memorize that because it dont concern me.
I  dont know if Americans have exception from REPORTING toi BIR, but I doubt it, because why would they?  I suppoue BIR want control so Americans dont try to sneak in other incomes without tax exoempt 

Dont be sure someone say something is true, just because someone claim to be expert 
E  g I KNOW several Filipino LAW FIRMS  make stupid ILLEGAL "solutions" to try to get around "The Anti-Dummy law" by using dummies!!!      Of course they cant stand a control... 
Many foreigners have been fooled to pay for such crap...

Then there is the question about WORK PERMIT.  I suppouse no problem to get it for such earnings, but I suppouse such earners need to have work permit, or are Americans extempt from that too?  I suppouse not because even volontary workers need work permit...

I havent read this newer  REVENUE  MEMORANDUM  CIRCULAR  NO. ,q1- O'O?-I
which I have at a pdf from somewhere, I have forgot where,
but I did read whole they wrote earlier back when BIR changed attitute towards demand tax at earnings at internet if higher per year than the tax free for everyone, which is some higher than the normal tax free as an incentive to register to make it legal. I didnt find that older among my notes in a half hasty look. I have so many 

Then there are the work permit laws.

Yeah Coach I fully admit that I didn't consider the Work Permits because I was sponsored both times that I worked here before i retired.

The reporting component is interesting!

I do believe you are right Carl. The Tax treaty protects ex-pats. I have a Kano friend teaching English online to students in China and other countries and is doing very well. He doesn't pay anything to the Philippines-just the USA as it should be especially if he wants to collect his Soc Sec pension when he is 62/65/67. He's in his late 50's now.

capricornrising wrote:

I do believe you are right Carl. The Tax treaty protects ex-pats. I have a Kano friend teaching English online to students in China and other countries and is doing very well. He doesn't pay anything to the Philippines-just the USA as it should be especially if he wants to collect his Soc Sec pension when he is 62/65/67. He's in his late 50's now.

Where to PAY TAX
is NOT same as not needing to report (and work permit).

The where to pay tax part I HAVENT qustioned.