REVENUE MEMORANDUM CIRCULAR NO. 73-2013 issued on November 26, 2013 amends Revenue Memorandum Circular No. 31-2013 on the tax treatment of those employed by the United Nations (UN) and its Specialized Agencies (SA), provides clarifications therefor as well as additional guidelines on the tax filing obligations of individual taxpayers concerned.

     Based on the provisions of the UN Privileges Convention, officials of the UN shall be exempt from Philippine Income Tax, regardless of their nationality or place of residence. Applying Section 17 of the UN Privileges Convention, only those officials whose names have been communicated to the Philippine government (through the Department of Foreign Affairs) shall be covered by the tax exemption.

     The said provisions apply to those officials employed by the UN, its principal organs, and those employed by its agencies, departments, offices, funds, programmes and bodies, excluding its Specialized Agencies.

     Applying Section 19(b) of the SA Convention, in relation to Section 18(b) of the UN Privileges Convention, officials of Specialized Agencies of the UN shall be exempt from Philippine Income Tax, regardless of their nationality or place of residence.

     In order that the tax immunities under the SA Convention may be properly invoked, the Philippine Government should have acceded to the terms of the SA Convention and indicated in the instrument of accession the specialized agencies with respect to which it seeks to apply the provisions of the Convention. Other Specialized Agencies not included in the instrument of accession may be covered by the SA Convention upon the submission of subsequent written notification to the Secretary General of the UN, as provided under Sections 41 and 43 thereof.

     In accordance with the UN General Assembly’s Report on the Co-ordination of the Privileges and Immunities of the United Nations and of the Specialized Agencies, the exemption of Specialized Agencies from Philippine Income Tax shall apply notwithstanding disparities in the immunities provided in the constitutional instruments of the Specialized Agencies (e.g., articles of agreement, charters).

     The tax immunities and privileges of Specialized Agencies not covered by proper instruments of accession or written notification shall be taken from their respective constitutional instruments as agreed to by the Philippine Government. Such Specialized Agencies cannot claim tax immunities and privileges beyond those provided in their constitutional instruments notwithstanding the provision of more comprehensive benefits under the SA Convention.

     Section 2(d) of RMC No. 31-2013 was amended to include the tax treatment of the International Committee of the Red Cross (ICRC). ICRC Delegates who, by definition, are Swiss nationals, and alien employees, their spouses and dependent members of their families shall be exempt from Philippine Income Tax.

     The procedures in the filing of Income Tax returns and declaration of compensation income of Philippine nationals and alien individuals who are covered and NOT covered by tax exemptions or immunities under duly recognized international agreements or local laws are specified in the Circular.

     International organizations maintaining offices, headquarters or operation in the Philippines and/or their respective employees claiming exemptions pursuant to the terms and provisions of international agreements or laws granting privileges to employees of international organizations shall file an application for confirmation of tax exemption/tax treatment with the International Tax Affairs Division of the Bureau of Internal Revenue.