ROGER WELINER v.

CIR DOCTRINE: The following requisites must concur before the income tax imposed therein shall apply: 1. There is a non-resident alien engaged in trade/business w/in the Phil 2. Income must have been received from sources w/in the Philippines As long as the income is derived from the sources coming w/in the Philippines, it will be considered as gross income regardless of place of payment FACTS: Roger, an Aussie, works as a Area Manager for Southeast Asia and Middle East, in Envirotech Corp a US Corp w/ headquarters in CA, represented by BB. Fisher & Co, a Philippine Corp. His salary is paid in his Bank Bank of America in Belmont, CA. During his employment, he made various trips across the Southeast and Middle east. All expenses were paid by Envirotech. In 1975, Roger went to the Philippines to visit BB Fisher & Co (involved in supplying equipments for mining sugar, environmental and general processing industries thru Envirotech). CIR classified Roger as non-resident alien engaged in trade w/in the Phil under Sec. 22(a) of NIRC. Thus, on the last week of Feb. 1980, Roger was taxed for 18424 w/ interest of 7738.08 = 26162.08. Roger protested the tax assessment and requested for it to be set aside, but the CIR denied the request. Roger requested for reconsideration but it was again denied, hence he appealed to CTA. ISSUE: W/N Roger is a non-resident alien engaged in trade or business w/in the Philippines in 1975 in accordance w/ Sec. 22(a) HELD: The case deals with the following provisions: NIRC Sec. 22. Tax on non-resident alien individuals - (a) non-resident alien engaged in trade or business within the Philippines. There shall be levied, collected and paid for each taxable year upon the entire net income received from all source within the Philippines by every non-resident alien individual engaged in trade or business within the Philippines the tax imposed by Section twenty-one: Provided, That for purposes of this title, a non-resident alien individual who shall come to the Philippines and stay therein for an aggregate period of more than one hundred eighty days during any calendar year shall be deemed a non-resident alien, doing business in the Philippines. NIRC Sec. 37. simply treats services (compensation for services rendered as part of gross income Revenue Reg. 2 (Sec. 8): The phrase "engaged in trade or business within the Philippines" includes the performance of personal services within the Philippines (Sec.155): Compensation for labor or personal services. - Gross income from sources within the Philippines includes compensation for labor or personal services performed within the Philippines regardless of the residence of the payor, or the place in which the contract for service was made, or of the place of payment. From the provisions above, it could be seen that Roger is a non-resident alien engaged in trade w/in the Phil. To summarize, the following requisites must concur before the income tax imposed therein shall apply: 1. There is a non-resident alien engaged in trade/business w/in the Phil 2. Income must have been received from sources w/in the Philippines These 2 reqs. are present in this case. Rogers contention that his income is not sourced within the Philippines is without merit. Roger stayed in the Phil for 191 days in behalf of Envirotech, represented in the Phil by BB Fisher. During these days, he received income from sources w/in the Phil although payment of his salary was made by Envirotech directly to his bank in CA. Rev. Reg. 2 Secs 8 and 155 clearly states that gross income from sources w/in the Philippines includes compensation for service performed w/in the Phil regardless of the residence of the payor, or the place in w/c the contract for service was made, or the place of payment. Thus, Roger, who having rendered personal service to Envirotech w/c is represented by BB Fisher in the Phil is rightfully considered as a non-resident alien engaged in trade/business and as such subject to income tax on income earned for personal services performed in the Phil in 1975.