RMO No. 51-2019: Prescribes the guidelines and procedures for the processing and issuance of Tax Residency Certificate

Key points

1. Registration requirements. Applicants in trade, business or practice of profession must hold a regular TIN. Those with ONETT or EO No. 98 TINs only must first update registration through BIR Form No. 1905. This does not apply to applicants whose only income is passive income or pension from foreign sources, for whom EO No. 98 registration is enough.
2. Basis of issuance. TRCs are issued on the basis of tax residency in the Philippines, and the applicant must prove residency under applicable tax treaties. Only taxpayers with full or comprehensive tax liability count as residents.
3. BIR-designed TRC. ITAD no longer signs TRC forms of foreign jurisdictions. The BIR TRC shows the taxpayer name, TIN, place of business, period covered, nature of transaction or income type, and amount of income, based on Integrated Tax System registration data. Registration details that differ from the applicant’s representations must be updated first.
4. Applicants no longer accepted. Upon effectivity, ITAD no longer accepts TRC applications of resident aliens, including pensioners and resident foreign corporations such as regional operating headquarters and regional or area headquarters.
5. Linkage with assessment offices. ITAD acts as repository of documents on foreign-sourced income and furnishes them to the RDO or Large Taxpayers Division. That office verifies proper declaration and payment, and assesses and collects any deficiency tax and penalties.
6. Letter of denial. A denial letter is issued if the taxpayer is not entitled, for example when there is no income abroad and only reimbursement of expenses is sought, or if fake documents are submitted. Denial continues until the real nature of the transaction is declared and authentic documents are submitted.

Who is affected

• Applicants for a Tax Residency Certificate
• Resident aliens, pensioners and resident foreign corporations (no longer accepted)

Deadlines and effectivity

• Upon effectivity of the Order: no more TRC applications from resident aliens and resident foreign corporations