Hey; my friend! Where’s your TIN?

By Raymund M. Gutib, former Tax Senior Manager

When you overhear someone uttering the phrase “Hey, my friend,” it is often from friendly locals greeting visiting foreigners, much like the way Filipinos receive a warm “Hello buddy” or “Hi mate” when abroad. On a typical day at the Department of Labor and Employment (DOLE), Department of Justice (DOJ) or Bureau of Immigration (BI), foreigners intending to work in the Philippines receive a slightly different greeting — “Where’s your TIN?” The question is a consequence of the Joint Guidelines signed by these agencies with the Bureau of Internal Revenue (BIR) on the issuance of work and employment permits to foreign nationals.

A Tax Identification Number (TIN) is a nine-digit number assigned by the BIR (plus a three-digit branch code, if applicable) to individual and corporate taxpayers for identification, tracking, and record-keeping purposes. Foreign nationals working in the Philippines are likewise required to register with the BIR and secure a TIN to ensure that they pay proper taxes. To intensify the monitoring of their compliance, the TIN has now become a prerequisite to obtaining employment permits and work visas.

For guidance, the BIR issued Revenue Memorandum Order (RMO) No. 28-2019, detailing the application process and documentary requirements for securing a TIN.

Manual registration only

Whether done personally, through the employer or the withholding agent, foreign nationals who intend to work in the country must secure their TIN manually with the BIR. They cannot use the eRegistration (eREG) System, which incidentally has been inaccessible recently on the BIR’s website. The applicant must fill out and sign an Application for Registration (BIR Form No. 1904) and have it stamped “Received” at the appropriate Revenue District Office (RDO) of the BIR.

Venue for submission of supporting documents

A foreign national applying for a Special Temporary Permit (STP) from the Professional Regulatory Commission (PRC) for the practice of regulated professions as enumerated in the RMO, or those securing a Special Working Permit (SWP) from the BI for work assignment that is relatively temporary and usually for a duration of less than six months, must submit BIR Form No. 1904 to RDO No. 39. As a supporting document, only a photocopy of the passport’s bio-data page is required.

For foreign nationals who are securing an Alien Employment Permit (AEP) from DOLE under an employment arrangement of six months or more or a Provisional Work Permit (PWP) pending the issuance of an AEP, they must file their BIR Form No. 1904 with the RDO having jurisdiction over the physical address of the employer. The required supporting documents include a photocopy of the passport’s bio-data page, employment contract or its equivalent indicating the term of employment, compensation package, and scope of duties. In all cases, however, no alien individual shall be registered with the Large Taxpayer (LT) Division, namely LTAD/ELTRD/LTD-Cebu/LTD-Davao.

Foreign nationals who are holders of AEPs or with working visas (9g) upon arrival, shall likewise be registered with the RDO having jurisdiction over the physical address of their employers.

If acting through a representative, the foreign national is required to submit an authorization letter, indicating the name of the withholding agent or authorized representative, including a photocopy of any government ID of the authorized person to secure the TIN.

Unfortunately, the RMO failed to set clear expectations from the employment permit-issuing agencies to verify the RDO where the foreign national applied for a TIN. Interagency coordination is necessary to avert a future unexpected last-minute transfer of registration during the filing of the income tax return or any potential consequence of filing at the wrong venue.

Registration update and cancellation

A registered foreign national shall, whenever applicable, update his registration information with the RDO where he is registered by filing an Application for Registration Information Update/Correction/Cancellation or BIR Form No. 1905.

A foreign national with an SWP, who had been registered under Executive Order (EO) No. 98 and subsequently issued a working visa (9g), is required to transfer registration from RDO No. 39 where he was initially registered, to the new RDO having jurisdiction over the place of business or the local residence of those in the practice of a regulated profession. They shall update their registration data and apply for business registration, if applicable.

A foreign national with a PWP, registered under EO 98 and later issued an AEP or working visa (9g) must update his registration information from EO 98 to “Employee,” with the RDO where he had been registered.

In case of termination of employment, a foreign national registered as an “Employee” must update his BIR registration to cancel his TIN. While I think failure to do so may not necessarily result in grave penalties, the TIN will remain active and raise the presumption of the continuing exercise of work or employment. To overcome this presumption in the event of a tax investigation, the foreign national may be required to provide proof of repatriation or departure from the country to confirm the cessation of employment.

Tax Treaty Relief Application (TTRA)

In the RMO, the BIR also reiterated its requirement for taxpayers to file a TTRA with the International Tax Affairs Division (ITAD) when availing of benefits under an applicable tax treaty, notwithstanding the Supreme Court ruling that a TTRA is merely confirmatory in nature.

With the Joint Guidelines in place, we can expect more integrative and streamlined processing of work and employment permits. Overlapping of responsibilities and duplication of requirements will hopefully be addressed and clarified now that interagency regulations have been realigned.