Case Digest (G.R. No. L-44501-05)
Case Digest (G.R. No. L-44501-05)
Facts:
John L. Garrison, Frank Robertson, Robert H. Cathey, James W. Robertson, Felicitas de Guzman and Edward Mcgurk v. Court of Appeals and Republic of the Philippines, G.R. Nos. L-44501-05, July 19, 1990, Supreme Court First Division, Narvasa, J., writing for the Court.The petitioners — John L. Garrison, Frank W. Robertson, Robert H. Cathey, James W. Robertson, Felicitas de Guzman, and Edward McGurk — are United States nationals employed at the U.S. Naval Base in Subic Bay who entered the Philippines under Section 9(a) of the Philippine Immigration Act of 1940. For the taxable year 1969 each received salaries paid from U.S. sources (specified amounts were found in the trial record). They received notices from Ladislao Firmacion, District Revenue Officer at Olongapo City, directing them to file their 1969 income tax returns; they refused, claiming they were special temporary visitors exempt under the RP‑US Military Bases Agreement (Article XII, paragraph 2) and thus not resident aliens required to file under Section 45 of the National Internal Revenue Code.
At the Court of First Instance of Zambales, Olongapo City (trial court), the petitioners were convicted for violation of Section 45(a)(1)(b) of the National Internal Revenue Code (failure to file returns) and sentenced to a fine of Two Thousand Pesos (with subsidiary imprisonment in case of insolvency) and costs (decision rendered May 28, 1983). The Court of Appeals affirmed the trial court’s judgment (opinion referenced in the record). The petitioners sought relief in the Supreme Court by a petition for review on certiorari under Rule 45.
Earlier, the petitioners had contested deficiency assessments before the Court of Tax Appeals, which set aside and cancelled BIR assessments for taxable years 1969–1972 (decision dated December 14, 1984). The Commissioner of Internal Revenue elevated that contest to the Supreme Court (G.R. Nos. 70116–19), and that contest was resolved when this Court affirmed the Court of Tax Appeals on August 12, 1986 (143 SCRA 397). In the present Rule 45 petitions, the petitioners argued (1) that their physical presence in the Philippines while employed at Subic did not make them resident aliens for filing purposes, and (2) that the Bases Agreement’s exemption from income tax should be read to include exemption from filing returns.
Issues:
- Are the petitioners, U.S. nationals employed at Subic Bay and present in the Philippines under special‑visa status, "aliens residing in the Philippines" required to file income tax returns under Section 45(a)(1)(b) of the National Internal Revenue Code?
- Does Article XII, paragraph 2 of the RP‑US Military Bases Agreement exempt such persons from the obligation to file Philippine income tax returns, or does it only exempt them from payment of income tax on U.S.‑source income?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)