The SEC requires all foreign directors to obtain a Tax Identification Number (“TIN”) from the Bureau of Internal Revenue (BIR). This requirement is outlined in Section 3 of SEC Memorandum Circular No. 1-2013 [Mandatory Incorporation of the Tax Identification Number (TIN) of Foreign Investors in All Forms, Papers, and Documents Filed with the SEC], which states that “[a]ll documents to be filed with the SEC by corporations and partnerships after their incorporation (i.e., General Information Sheets) shall not be accepted unless the TIN of all its foreign investors, natural or juridical, resident or non-resident, are indicated therein.”
However, the requirement for a TIN does not automatically subject foreign directors to Philippine taxes. Tax liability depends whether an income was earned, the source, as well as the residency status of the director. Generally, foreign directors are taxed on income derived from Philippine sources (e.g. dividends, income and interests). Thus, if they do not earn income from the Philippines, they do not have tax obligations in the country.
Accordingly, foreign directors are generally not subject to personal annual compliance obligations in the Philippines solely based on their directorial role. Generally, a non-resident foreign director is only required to comply with Philippine tax obligations if he derives income from Philippine sources. In the absence of such income, he would not generally have tax liabilities or annual compliance obligations in the Philippines solely due to his directorial position.
In line with this, Section 4(I)(V) of Revenue Regulations 7-2012 dated 2 April 2012 in relation to Executive Order No.98 mandates that a one-time TIN must be secured and incorporated in all forms, permits, licenses, clearances, official papers, and other documents which they secure from these government agencies and instrumentalities.
The requirements for the application of one time TIN for Foreign National are as follows:
1. Accomplished two (2) originals of BIR Form No. 1904;
2. Photocopy of the Passport Bio page (including date of entry/arrival and exit/departure stamp, if applicable);
3. Apostilled Marriage Certificate, if applicable; and
4. Apostilled Special Power of Attorney (SPA) or authenticated by the Philippine Embassy or Consulate General, indicating the purpose and name of authorized representative; (1 certified true copy, original for presentation), if transacting through a representative.
