Respondent Juliane Baier-nickle, a non-resident German citizen, is the President of JUBANITEX, a domestic corporation engaged in manufacturing, marketing on wholesale only embroided textile products. The corporation appointed and engaged the service of respondent as commission agent. It was agreed that respondent will receive 10% sales commission on all sales actually concluded and collected through her efforts.
In 1995, respondent received the amount of PhP1,707,772.64 representing her sales commission income from which JUBANITEX withheld the corresponding 10% withholding tax amounting to PhP170,777.26 and remitted the same to the BIR. Respondent filed a claim to refund the amount PhP170,777.26 alleged to have been mistakenly withheld and remitted by JUBANITEX to the BIR. Respondent contended that her sales commission income is not taxable in the Philippines because the same was a compensation for her services rendered in Germany considered as income from source outside the Philippines.
ISSUE: WON respondent's sales commission income is taxable in the Philippines?
HELD:
YES. Commission received by respondent were actually her remuneration in the performance of her duties as President of JUBANITEX and not as a mere sales agent. The income derived by respondent is therefore an income taxable in the Philippines because JUBANITEX is a domestic corporation.
Pursuant to the foregoing provision of the NIRC, non-resident aliens, whether or not engaged in trade or business, are subject to Philippine income taxation on their income received from all sources within the Philippines.
Respondent failed to discharge the burden of proving that her income was from sources outside the Philippines and exempt from the application of our income tax law.
In 1995, respondent received the amount of PhP1,707,772.64 representing her sales commission income from which JUBANITEX withheld the corresponding 10% withholding tax amounting to PhP170,777.26 and remitted the same to the BIR. Respondent filed a claim to refund the amount PhP170,777.26 alleged to have been mistakenly withheld and remitted by JUBANITEX to the BIR. Respondent contended that her sales commission income is not taxable in the Philippines because the same was a compensation for her services rendered in Germany considered as income from source outside the Philippines.
ISSUE: WON respondent's sales commission income is taxable in the Philippines?
HELD:
YES. Commission received by respondent were actually her remuneration in the performance of her duties as President of JUBANITEX and not as a mere sales agent. The income derived by respondent is therefore an income taxable in the Philippines because JUBANITEX is a domestic corporation.
Pursuant to the foregoing provision of the NIRC, non-resident aliens, whether or not engaged in trade or business, are subject to Philippine income taxation on their income received from all sources within the Philippines.
Respondent failed to discharge the burden of proving that her income was from sources outside the Philippines and exempt from the application of our income tax law.
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