Foreign workers now required to secure Taxpayer Identification Number

MANILA, Philippines — Foreign nationals who intend to work or engage in business in the Philippines are now required to register with the Bureau of Internal Revenue (BIR) and get a Taxpayer Identification Number (TIN), according to the agency.

This is pursuant to Revenue Memorandum Order No. 28-2019, issued by Internal Revenue Commissioner Caesar Dulay last May 30, prescribing the guidelines for the registration of foreign nationals who want to work or do business in the country.

The issuance of the RMO came after the BIR signed joint guidelines with the Department of Labor and Employment (DOLE), Department of Justice (DOJ) and the Bureau of Immigration (BI), which tightened the rules on the issuance of work and employment permits to foreign nationals.

This is also in line with the Department of Finance (DOF)’s orders to strengthen efforts in monitoring foreign workers, particularly in the online gaming industry, to ensure that they pay the correct taxes.

Under the RMO, foreign national who intend to work, engage in trade, or business in the Philippines are required to secure  a Taxpayer Identification Number (TIN) with the BIR before they can be issued with working permits.

The BIR said non-resident aliens who are not engaged in trade or business shall be issued a TIN for withholding taxes on their income from sources within the Philippines. The withholding agent shall apply for the TIN in behalf of the non-resident alien.

In particular, the BIR said foreign nationals who want to work in the country under an employment arrangement should register with the Revenue District Offices (RDO) that have jurisdiction over the physical address of their employer.

Foreign nationals who intend to work, engage in specific activities, or render services outside of an employment arrangement, meanwhile, must secure their TIN from RDO 39- Quezon City.

Other non-resident aliens who already have working visas are also required to register with the RDOs that have jurisdiction over the address of their employers, while those who plan to engage in trade or business should be registered with the RDO that has jurisdiction over their place of business or local residence, in the case of practice of regulated profession.

The BIR also advises foreign nationals to update their registration information with the bureau, if applicable.

Employers of foreign nationals with Provisional Working Permits (PWP), and later on had been issued an AEP or working visa with proper authorization, shall update their employee’s registration information with the RDO where they have been registered.

In case of termination of employment, the foreign nationals shall update their registration information.

Moreover, foreign nationals with Special Working Permits (SWP) and later on had been issued a visa should transfer their registration from RDO 39 to the RDO that has jurisdiction over their place of business or local residence.

According to the BIR, registered alien employees may apply for preferential tax rates if they are a resident of a country which has a tax treaty with the Philippines.

Currently, the Philippines has 43 effective tax treaties.

“However, the tax liability of foreign nationals engaged in trade or business or are gainfully employed in the Philippines will depend on the provisions of the applicable tax treaty. Moreover, the entitlement to tax treaty relief is on a case-to-case basis depending on the facts as represented by the foreign national applicant,” the BIR said.

Earlier, the Department of Finance (DOF) said the government has not been able to collect an estimated P32 billion in income taxes annually from foreign workers, particularly the offshore gaming industry.