Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 1129)
The main purpose of Presidential Decree No. 1129 is to further amend Republic Act No. 3538 by extending tax exemptions to non-Filipino personnel of the American Kor-Asian Foundation, Inc., specifically exempting them from income taxes on their salaries and stipends received in dollars.
PD No. 1129 specifically exempts non-Filipino citizens serving on the staff of the American Kor-Asian Foundation, Inc. from the payment of income taxes on their salaries and stipends in dollars.
Before PD No. 1129, foreign charitable organizations like the American Kor-Asian Foundation, Inc. were exempted from payment of gifts, franchise, specific percentage, real property taxes, and their foreign personnel were exempted from income taxes pursuant to Section 27(E) of Presidential Decree No. 69.
Corporations or associations organized and operated exclusively for charitable purposes were exempted from taxes under Section 27(E) of Presidential Decree No. 69, as amended.
The policy reason cited is that non-Filipino personnel of foreign charitable corporations or associations should be exempted from income taxes on their salaries and stipends in dollars received for services rendered, to support the operations and charitable works of these organizations.
No, PD No. 1129 specifically exempts only non-Filipino citizens from income tax on their salaries and stipends; Filipino citizens are not mentioned as being exempted under this decree.
Presidential Decree No. 1129 took effect immediately upon its signing, which was on April 25, 1977.
PD No. 1129 further amended Republic Act No. 3538 and referred to the tax exemption provisions under Section 27(E) of Presidential Decree No. 69, extending those exemptions specifically to non-Filipino personnel of the American Kor-Asian Foundation, Inc.
The income exempted under PD No. 1129 includes salaries and stipends in dollars received by non-Filipino personnel by reason of services rendered to the American Kor-Asian Foundation, Inc.