BIR planning to tax OFWs

lawrence01 · Apr 15, 2007

hehe, still confusing for me...
does this mean that assuming you were granted your Green card, permanent residency on...
Jan 2008
and you never leave the US at all for the next 30 months straight.
does that mean that by August 2010.....you can now apply for US citizenship?

Yes, that's what I've understood by the chart (in the very 1st row) in the 1st link that pinoy_guy gave and this is also how the lawyer I had watched not so long ago has explained it. It is 30 months continuous physical presence or in domicile. It becomes 5 years if the green card holder gets in and out of the US as some do but should be not more than 6 mos outside US if he chooses to do it this way as that is tantamount to abandonment of green card status for reasons as to why would a green card holder who is presumed to want to become a US citizen spend more time outside the US than being domicile in US soils. A tourist visa will do if he wants to spend more time in a given year outside the US and the green card status better left to those who intends to stay in the US for more than 6 mos and plans to be a US citizen.

RNHawaii34 · Apr 15, 2007

it only takes 2.5 years of straight us residency for an immigrant to get us citizenship??
can someone confirm this? i thought it was 5 years?

you have to live in the u.s. for 5 years, you can apply for american citizenship. however, i think if you are married to an american citizen, then it will take you 3 years only. just check the uscis website for this, just to be sure.

lawrence01 · Apr 15, 2007

Try to read the links pinoy_guy gave, it said there you can apply once you have accounted for 1/2 (30 mos.) of the 5 years for those who are LPRs and 1/2 (18 mos) of the 3 years for those who married US citizens. The way of counting starts from the time the green card was issued and the time the applicant is physically present or domicile in the U.S. So, a person who spends half of the time (6 mos) in the US and half of the time (6 mos) outside the US is only accounted for 6 mos of physical presence in the US even though he already have his LPR/green card for 1 year and if he does this it will take him 5 years while someone who has stayed and never left the US for 30 mos (2.5 yrs) can already apply because he has already satisfied the min. requirements as explained in those links provided.

Try consulting a lawyer for confirmation and further clarifications.

john83, BSN, RN · Apr 15, 2007

In my humble opinion and interpretation of the chart given, I think a nurse who doesn't have a US citizen spouse must be IN POSSESSION of the green card for 5 years and not only that but also a continuous resident for a period of at least 30 months Physical Presence in the United States as stated in the Time as a Permanent Resident section found directly below that chart:

"In most cases you must be a Permanent Resident for a certain number of years before you may apply for naturalization. But it is not enough to be a Permanent Resident for the right number of years. You must also be in "continuous residence" during that time. "

The case is different if you have a US citizen spouse( Are currently married to and living with a U.S. citizen

AND

Have been married to and living with that same U.S. citizen for the past 3 years

AND

Your spouse has been a U.S. citizen for the past 3 years). Time as Permanent Resident 3 years, Physical Presence in the United States 18 months.

Therefore, applications maybe started after the minimum attainment of both the "greencard residence" and "physical presence in the USA".

john83, BSN, RN · Apr 15, 2007

It's counter-productive in my opinion. First and foremost is that these foreign-workers are already being taxed on the host country they are working in just like any citizens from that host country. Second, these foreign workers do not have to make remittances back to the Philippines but as w/ Filipino culture and we share this w/ the Mexicans we remit money to help relatives left behind and the annual remittances are keeping the Philippines afloat financially.
It is counter-productive in all accounts. I don't see any good coming of it. This will erase the current Govt's thrust on encouraging all remittances to go through legal channels (through Banks). Everything will be via unconventional ways again. They are already having trouble tracking remittances since majority still use unconventional ways to remit money as it is. What more if such law is passed. Back to stone-age.
Third, there maybe some limitations as far as nurses for the US is concern. If the nurse is working via green card (US immigrant) then why would the former country tax them ?? No sense at all. To be honest about it and to go further... why would the POEA (this is one vehicle where they will know who left the Philippines) have a say to deployment of nurses to USA if these nurses were filed for green cards (US immigrant). They are US immigrants already. If there are any trouble by Filipino nurses w/ their US employers, does POEA have the right to intervene? Legal, financial or any support at all? None, right? Perfect example would be what happens to the Nurses in the Sentosa Case. Any thing that happens in the US is solved in the US and by using the US legal system or immigration system, if needed. No outside force can intervene or intercede. This would also scare nurses that plans to keep their Filipino Citizenship through the relatively new Dual-Citizenship Law that the current Administration has passed as well. This will render that Law moot or useless as well. No one will apply for Dual-Citizenship (for those that previously relinquished it) and no one will keep their Filipino Citizenship for those on their way to being US Citizens. So, goodbye to that idea and the plans for the Philippines to be the retirement haven of successful foreign workers. There are retirement havens being put up in Asia like Thailand, Malaysia and Indonesia and I won't be surprised if Vietnam and Cambodia joins in after a couple of years to welcome foreign retirees and expats. Those are nice countries to retire to.
I'm pretty sure that nurses in the US legally (US immigrants/green card holders) would not be part of this for the simple argument of being immigrants already. Hardest hit would be, in my opinion, are the those on just temporary working permits/visas, whether it be blue-collar jobs or a 'high-end' job. They are just temporarily in their host country as long as they keep their job so if any such thing will pass it would affect those temporary workers w/ just work permits or working visas and do not hold a green card (not US legal Permanent Residents).

Indeed, right to the point. I don't know what our government here in the Philippines is thinking, but for sure everything is getting from bad to worse; As for me, I think I am resolved on becoming a US citizen if ever I'd be given the chance in the future and happily renounce my Filipino citizenship(and no plans of applying for dual citizenship). I've read somewhere that the US government doesn't encourage the use of dual citizenship, because you will also be answerable to the laws of the other country(including taxation), etc.

Honestly, if I'd be given a chance to be a US citizen now, I'd be more than happy renounce to renounce my Filipino citizenship.

lawrence01 · Apr 15, 2007

In my humble opinion and interpretation of the chart given, I think a nurse who doesn't have a US citizen spouse must be IN POSSESSION of the green card for 5 years and not only that but also a continuous resident for a period of at least 30 months Physical Presence in the United States as stated in the Time as a Permanent Resident section below of that chart:
In most cases you must be a Permanent Resident for a certain number of years before you may apply for naturalization. But it is not enough to be a Permanent Resident for the right number of years. You must also be in "continuous residence" during that time.

The case is different if you have a US citizen spouse( Are currently married to and living with a U.S. citizen
AND
Have been married to and living with that same U.S. citizen for the past 3 years
AND
Your spouse has been a U.S. citizen for the past 3 years). Time as Permanent Resident 3 years, Physical Presence in the United States 18 months.

Therefore, applications maybe started after the minimum attainment of both the "greencard residence" and "physical presence in the USA".

Actually you don't have to be in the US in a continuous basis, as in mandatory. Many children who are green card holders via family petition from the Philippines go back and forth from US and PI. Any green card holder is allowed to be outside the US, at any given time as long as it doesn't go beyond 6 mos (think of it as reverse tourist visa for the lack of a better term). They need to accumulate 30 months total of physical presence in the US to begin application. The presumption is, if one spends half-and-half (as majority does who are family-based petitions), how many years will these applicants accumulate the minimum 30 mos. It is 5 years. As opposed to someone who chose to be in the US on a continuous basis for 30 mos. This person who chose to be in the US for 30 straight months, doesn't need to wait for another 30 mos (2.5 years) to begin application. He already reached the minimum req'ts. The 30 months req't is supposed to be 'earned' while domicile (physically present) in the US and it may be accumulated continuously or by piece-meal basis, such as 6mos at a time in a given year. The other half spent outside US doesn't count.

Anyway, depending on what one believes, some people will be applying for citizenship after 30 months (2.5 years) of continuously being physically present in the US while others will only be considering it only after 5 years.

*The GC holder has to apply for it and pay fees and pass the exams, etc.. so it is not automatic. Also, there are those married to US citizens that never applied for naturalization even after decades of being married and domicile in the US. If one doesn't apply for it it doesn't matter how long you are in already living in the US.

lawrence01 · Apr 15, 2007

Indeed, right to the point. I don't know what our government here in the Philippines is thinking, but for sure everything is getting from bad to worse; As for me, I think I am resolved on becoming a US citizen if ever I'd be given the chance in the future and happily renounce my Filipino citizenship(and no plans of applying for dual citizenship). I've read somewhere that the US government doesn't encourage the use of dual citizenship, because you will also be answerable to the laws of the other country(including taxation), etc.
Honestly, if I'd be given a chance to be a US citizen now, I'd be more than happy renounce to renounce my Filipino citizenship.

Yeah, it's a big mistake and this is the natural reaction that is expected if such measures do happen. No one wants to have the feeling of being 'milking cows' and especially if the other one who is milking them is just a full-blown parasite. The US' taxes maybe high but everyone knows where the taxes goes.

Such a move has more cons than there are pros and the cons are in a domino-effect or a wave-like motion. That is why I do not think it will happen. Philippine officials and politicians are known to say things in haste, w/o proper research first, and when they do their in-dept research, they'll realize that it would be a big mistake. If they fail to realize it.... God help the Philippines. Not only did they drive the able and skillful to work outside the PI but had successfully forced them to cut-off the umbilical cord that links them from their country of origin. The process is complete.

Every time I hear something foolish like this I am always reminded of what former President Quezon said decades ago. Forgot the exact words but it is something like "I rather have the Philippines run like hell by Filipinos than run like heaven by the Americans". How prophetic.

Rep · Apr 15, 2007

That is the exact statement. I usually say that when we Filipinos here talked about Philippine government officials back at home.

"I rather have the Philippines run like hell by Filipinos than run like heaven by the Americans". How prophetic.

YAJRN · Apr 15, 2007

:angryfire What? I felt very much dismayed on the fact that this agency of the Government plans to extract OFW's of another tax. First and foremost an overseas worker had already been taxed from filing of documents until out of the way to the airport! Then these immigration personnel would ask you for any remaining peso that you have in your pockets when you are about to qeue for passport validations.They always think that if you are leaving to states you'll be an instant millionaire. Where are the brains of this BIR people, thinking that these OFW's such as doctors and accountants in banks would have bigger earnings? They really assume it big because they convert it to pesos. Common sense, people of the world! Remittances are also tax deductable. My grandpa would send me $100, when I will claim it in the bank I would just get $89. Come to think of it? $11 deduction is already big then how much more if they tax you with your earnings? Is that the way this benevolent government helps us? Where in fact we in our own yard we can't find a sustainable wage? We gamble ourselves, expose to radiations, descriminations, beatings, rapes and all other bad scenes beyond our wild imaginations. Then these BIR or this kind of government per se would milk us again.

I would be glad if these people will come as soon as possible for our aid in times of crisis. Look at what happened on Lebanon War. Filipina OFWs in Lebanon are cramping on Churches for shelter because the government can't send relief efforts as soon as possible, even C-130 planes can't reach them for evacuation. Our helpless countrymen were begging from other nationalities. Is this where our taxes go? If this would be pushed through, Filipino citizens would be an extinct lot. Many would be discourage to gamble for abroad because it's still the same. What you earn there is taxed and also taxed by your own country. The opinions of my fellow nurses here are right. OFWs are called new heroes but the BIR would shout tax evaders.

They are sharpening a double blade stance to cut us into pieces.

I've been reminded of my history class base on the Philippine history books there was once a congressman in the 60's era lobbying for a law to ask the United States of America to declare Philippines as the 51st state. Wow! Is this for real? I forgot the name of the congressman, he was the laughing stock of his colleagues but he is very much right.What's the use of singing the national anthem where infact our stomachs and hearts longs for other lands.I hate to write this but what is the point of promoting our serious nationalism, where in fact the solons who stick to it wears I love new york shirts. We are living hypocrites of our times. Furthermore, majority of filipino families have their own country of patronage such as Japan, Saudi Arabia, U.K., USA and etc except planet Mars. We can't blame them because we can't deny our colonial mentality that is ingraine in our hearts and souls. You can't be a Filipino moviestar nowadays if you have no foreign blood. We are against pacifist Japan in the yester years. Our grandparents detest them but now we have the guts to send our ladies and gents to exploit the land of the rising sun for survival. Then those old people never knew that what they ate is from the very people who bayonetted their babies and love ones in old times. I'm not instigating sentiments here, my point is we are not much sure of our identity as Filipinos. Survival is the priority. Why not we let Uncle sam colonized us once again after all the majority wanted to stay alive, joke only.

Finally, If bad things had been taking place, then worst scenes are coming up, I predict that Filipinos will be an extinct lot in the coming years. The government has it's foolish ideas of serving the people of our country. :angryfire

denzel · Apr 15, 2007

Thanks for the links. The 1st link w/ the chart was esp. good. So, it's confirmed that it only takes 30 months of continuous physical presence in the US but will take 5 years if he gets in and out (but nothing more than 6 mos. outside the U.S.). I think any thing more than 6 mos outside the US would constitute abandonment and would have to apply for a re-entry permit w/ valid reasons.

I think you misundrestood the article.. pls read it well, you are confusing us. you can only apply for citizenship after five years of being an immigrant. continous residency and physical presence has a different meaning. continous residency involves the no. of days you had outside the US in a single trip. AND physical presence involves the no. of days outside the US for the entire trip you had in five years. so must meet both physical and continous residency requirements to obtain naturalization.

pinoy_guy · Apr 15, 2007

another press release, this time from administration candidate defensor.

the more i read, the more i think that the philippine government is seriously planning for this.

might be implemented after anti-terror law takes effect.

this reminds me of the time when they were still thinking of implementing the expanded value-added tax: at first everyone denied it, then later they paraded a gaggle of "experts" who testified that the e-vat would not raise prices of commodities because the manufacturers are supposed to "absorb" it.

so what happened after implementation of the e-vat?

prices went up.

this is deja vu all over again.

http://www.gmanews.tv/story/37871/taxing-ofw-remittances-is-foolish---defensor

taxing ofw remittances is 'foolish' - defensor

04/11/2007 | 06:18 pm

. . .
the former presidential chief of staff quickly rejected the move to revive a plan first broached in 2004 to tax the remittances of filipino professionals abroad.
the bureau of internal revenue (bir) however clarified that the proposal would not cover factory workers and domestic helpers.
. . .
"besides, ofws and their families already get taxed indirectly when they spend for consumption or investments here," defensor pointed out.
"when a filipino nurse working in the u.s. comes home and buys a residential condominium unit here, philippine taxes are paid. when the nurse sends money here that is spent at jollibee or sm, consumption taxes get paid," he further explained.
. . .
in 2004, the department of finance pushed a similar proposal to remove the ofws' income tax exemption as one of several measures to collect more revenues for the government.
the dof had to withdraw its proposal from congress after ofws and their families launched protest actions against it.
it claimed then that the now-defunct presidential task force on tax reforms did not intend to exempt all ofws from income tax. it said that the plan, in fact, was to tax only those earning more than $6,000 annually and to exempt the "small income" workers.
the department proposed that congress "make the high-paying overseas filipinos, like professionals and technical workers, share in the burden of financing the public sector" by re-imposing the income tax on those with annual gross incomes of at least $6,000.
the revived plan seemingly supports the recommendations of the de la salle university's business and economics experts who conducted a study, titled, "the economic impacts of international migration: a case study on the philippines," to impose income tax on remittances from highly paid ofws.
the study done by tereso tullao, michael angelo cortez and edward see said taxing the remittances of filipino professionals from abroad would help reduce the economic ills of overseas deployment has generated. "such a move can arrest the possible hollowing effects on industries and mitigate the loss in international competition," the group said.
internal revenue commissioner jose mario c. buñag, however said in an interview that there has been no "definite decision" on whether to push for the removal of ofws' income tax exemption or not, according to a businessworld report.
in the event the plan is approved, the tax would cover only professionals such as bank employees and doctors "who make so much money."
taxing ofws will require an amendment of the national internal revenue code of 1997, which presently provides that "an individual citizen of the philippines who is working and deriving income from abroad as an overseas contract worker is taxable only on income from sources within the philippines," the report noted.
. . .
before the 1997 tax reform, ofws were subjected to income tax. since they also paid income taxes abroad, their payments were used as credits against their liabilities in the philippines.
the government has documented around eight million filipinos presently working abroad, remitting a record $12.76 billion back to the philippines in 2006. they remitted $10.69 billion in 2005.
the bangko sentral ng pilipinas said the higher deployment of workers and better remittance channels accounted for the increase. the bank expects remittances to further go up to $14.7 billion this year.

the 3 "smart" people who proposed this idea are tereso tullao, michael angelo cortez and edward see.

how in the world could "taxing the remittances of filipino professionals from abroad help reduce the economic ills [that] overseas deployment has generated?"

how can "such a move arrest the possible hollowing effects on industries and mitigate the loss in international competition?"

i would like to point out the "forked tongue" approach to this issue: on one hand they mentioned taxing remittances; on the other hand they said income tax.

i think they already shot down the plan to tax remittances because it would only drive the remittances to the underground channels.

this makes me conclude that the ultimate plan is to impose an income tax on all filipinos, including immigrants.

the reference to income tax collection from ofws before the 1997 tax reform is telling.

lawrence01 · Apr 16, 2007

I think you misundrestood the article.. pls read it well, you are confusing us. you can only apply for citizenship after five years of being an immigrant. continous residency and physical presence has a different meaning. continous residency involves the no. of days you had outside the US in a single trip. AND physical presence involves the no. of days outside the US for the entire trip you had in five years. so must meet both physical and continous residency requirements to obtain naturalization.

I'm sorry if this confuses you but this is not only my personal interpretation but I heard this same explanation from an American Immigration lawyer who had a TV show at ANC/TFC. In fact, I heard this first from him and someone just gave a link to it here at the forums. Anyway, I only mentioned it only as passing-by. It isn't really the main topic of this thread so we mustn't dwell on it much. It so happens someone asked for it and I have never said that continuous residency and physical presence are the same.

However, this is just my personal interpretation and what I've heard from an immigration lawyer and I am not here to impose what I believe or that my analysis is correct. I very much respect every one else's view points and analysis or interpretation and I expect the same from them. We are in a forum posting away to discuss things and give friendly exchanges and nothing more.

Anyway, just like what I've said from a previous post. Some may interpret it that way, some a diff. way but our personal interpretation wouldn't really matter anyway. It is how the immigration lawyer interprets it (and executes it) and they are not always the same, ironically.