RESIDE NONRESIDENT ALIEN (NRA) NRA ENGAGED IN TRADE OR BUSINESS NRA NOT ETB

NT (NRA-ETB)
ALIEN
1. DEF’N: INDIVIDUAL WHOSE RESIDENCE 1. GENERALLY, TAXED ON NET INCOME 1. GENERALLY, TAXED ON GROSS
IS NOT W/N THE PHIL. AND IS NOT A a. ALLOWED TO CLAIM INCOME
CITIZEN THEREOF: DEDUCTIONS INCIDENT ETB a. NO BENEFIT OF
a. NOT PHYSICALLY PRESENT IN 2. NRA-ETB IS TAXED IN THE SAME DEDUCTIONS AND
THE PHIL, BUT DERIVES PHIL MANNER AS: 1. CITIZEN AND 2. PERSONAL AND/OR
SOURCE INCOME RESIDENT ALIEN ON TAXABLE INCOME ADDITIONAL EXEMPTIONS
b. EVEN IF PRESENT IN THE PHIL., DERIVED FROM PHIL. SOURCES b. 25% FLAT TAX RATE
MERELY TRANSIENT OR 3. ETB: 2. FDAP INCOME
SOJOURNER a. “DOING BUSINESS” a. FIXED
c. TRANSIENT STATUS  b. NRA COMES TO PHIL AND b. DETERMINABLE
DETERMINED BY SUBJECTIVE STAYS FOR MORE THAN 180 c. ANNUAL
TEST (I.E. INTENT AS REGARDS DAYS FOR THE YEAR d. PERIODIC
LENGTH/NATURE OF STAY) c. NOTE: NRA DOES NOT HAVE e. NIRC DEF’N:
i. TRANSIENT  COMES TO BE PHYSICALLY PRESENT i. FDAP INCOME
TO PHIL FOR IN THE PHIL FOR MORE THAN SUBJECT TO
DEFINITE PURPOSE 180 DAYS FOR THE YEAR TO 25% FLAT TAX
W/C MAY BE BE CONSIDERED AS ETB. RULE 3. CAPITAL GAINS FROM SALE OF
ACCOMPLISHED MERELY ESTABLISHES A DOMESTIC SHARES UNDER
PROMPTLY PRESEUMPTION. THUS IF NRA SUBSEC. C AND SALE OF REALTY
ii. NOT TRANSIENT  CLEARLY ETB, HE WILL BE UNDER SUBSEC. D
EXTENDED STAY CONSIDERED AS SUCHEVEN IF a. NOT SAME AS CITIZEN
NECESSARY TO HIS STAY IS ONLY 180 DAYS AND RESIDENT ALIEN
ACCOMPLISH OR LESS (TRT: VERIFY!)
PURPOSE d. INVOLVES EXAMINING 4.
ACTIVITIES IN THE PHIL
CARRIED ON BY NRA, HIS
EMPLOYEES, AGENTS OR
OTHER REPRESENTATIVES
e. PROCESS OF PRODUCING
INCOME FROM ACTIVELY ETB
ACTIVITIES AS
DISTINGUISHED FROM MERELY
 OWNING INCOME PRODUCING
PROPERTY (I.E. PASSIVE
INCOME)
f. IN FINE, MUST BE
REGULAR, CONTINUOUS
AND CONSIDERABLE
BUSINESS ACTIVITIES
i. ISOLATED OR
SPORADIC
TRANSACTIONS NOT
ETB
4. PHIL. SOURCE PASSIVE INCOME
SUBJECT T0 FINAL TAX (SUBSEC. B)
a. SEE SUBSEC. B
b. 25% FT, IF GROSS INCOME
FROM CINEMATOGRAPHIC
FILMS
c. 10% FT, IF CASH AND/OR
PROPERTY DIVIDENDS FROM
DOMESTIC CORP.
5. CAPITAL GAINS FROM SALE OF
DOMESTIC SHARES UNDER SUBSEC. C
AND SALE OF REALTY UNDER SUBSEC.
D
a. SAME AS CITIZEN AND
RESIDENT ALIEN
6. NOTE: SUBSECTIONS B, C AND D
INCOME ARE ALL SUBJECT TO FINAL
TAX, THUS NO LONGER INCLUDED IN
ANNUAL ITR
7. NOTE: ONLY SUBSEC. A INCOME
INCLUDED IN ITR
8. INCOME SUBJECT TO GRADUATED
RATES OF 5-32% (SUBSEC. A)
a. SEE SUBSEC A
b. NOTE: SUBSEC. A INCOME IS
AGGREGATED AND REPORTED
IN THE ANNUAL ITR
c. GROSS INCOME (SUBSEC. A) –
DEDUCTIONS – PERSONAL
AND/OR ADDITIONAL
EXEMPTIONS = TAXABLE
INCOME X GRADUATED RATES
5-32%