A Philippine Tax Question

[Thomas]

I suppouse the problem can be SOLVED by:

A/ Write a LOAN document

(with the real estate as collateral if want to. IF register it, it cost a stamp fee, but I suppouse no law demand the collateral is registered.  It has to be on own land to be registered collateral anyway.)

 

Or B/  The FOREIGNER OWN the house   :)    

(It's allowed if it's on leased land.)

[Jack Peterson]

  Or B/  The FOREIGNER OWN the house        (It's allowed if it's on leased land.)

 

 

Only problem with that thomas, is that you can't lease land from your Wife

[Jack Peterson]

I suppouse the problem can be SOLVED by: A/ Write a LOAN document

 

 

 Yes Thomas that is one way out, for a girlfriend gift but the BIR will want to see the loan agreements and they would have to be Bona-fide Loan Companies, Bank/ Credit Union. It all gets very Confusing and as usual, Accountant talk, is pretty hard to decipher at times.

 

I can explain a little more later when I answer Dave "H" OK  :)

 

 

:tiphat:

[Jack Peterson]

I will try to slip through the same cracks as everyone else and cross my fingers that the following event does not occur:

 

 

 Dave I quite agree, Once you are on the Radar. it seems you are doomed.

 

I listened for 2 hours to my Accountant wife, telling me the Thoughts of the BRI and you are so right. If you can, stay away from it. I can't because of what, she is.

 

But to answer your Question. any money you give your Legal Wife is not a Gift unless, the amount is greater than x,y,z and it goes into why's and wherefores................ Big Brother with no real Direction :no:

 

Wish you the best with this Dave.  :thumbsup:

 

:rolleyes: Dang man, I thought for 1 minute I would have to buy me a new Barong and Azon a new Hat! :unsure:  :unsure:

 

:tiphat:

[Jack Peterson]

We have never had to provide a source of funds thus far so if what you say is true then this is a very recent BIR requirement that we have not yet heard of.. Gift tax? No idea!!  I would imagine that there are millions of women in the R.P that must owe a huge amount!! Quite unknowingly!

 

 

 

 

As with most things we don't Understand about the PI, Rule Changes come and we are not really, up on these changes until they affect us and then of course, we will question it, to our dismay. The Topic will I feel go on for some time but in the end I guess, we just have to accept. Things are Changing and the BRI, as in most Countries,Tax Administrations, will have there way. Once you are on their radar, it will be very difficult to get out of it.

 

 

:tiphat:

[Thomas]

 

  Or B/  The FOREIGNER OWN the house        (It's allowed if it's on leased land.)

 

Only problem with that thomas, is that you can't lease land from your Wife

Do it with someone else then   :)

(I wrote yesterday (in an other topic) if a land owner don't want to lease, it can be solved by a combination of "lease", "loan" with the land as collateral with option for you to buy it, so he can't sell it to someone else if the land value go up. Lease and loan costs ballanced so the OTHER like it by he earn a litle extra every year. 

Similar idea can be used with "anyone" at least if the land is titled. If it isn't titled, there can be some legal problems.)

 

 

I suppouse the problem can be SOLVED by: A/ Write a LOAN document

 

 Yes Thomas that is one way out, for a girlfriend gift but the BIR will want to see the loan agreements and they would have to be Bona-fide Loan Companies, Bank/ Credit Union. It all gets very Confusing and as usual, Accountant talk, is pretty hard to decipher at times.

 

I can explain a little more later when I answer Dave "H" OK  :)

:tiphat:

Did you forget me, or did you get tired by thinking of taxes?   :)    I'm still recovering from writing Swedish tax forms over a week ago.  (First I wrote "weak" instead of "week". Perhaps it was a Freudian misswriting  :lol:

But a loan document can be written, so BIR can see it if they want.   When the foreigner finance something, a loan document can assist as protection from being screwed too...

Are you sure BIR have law support it has to be a loan from a Bank to be valid in their point of view?   Aren't BIR satisfied if the foreigner have filled the tax form and PAY SOME TAX for the "interest"?    :mocking:

 

((When I do something in the grey area in Sweden for me or a customer/friend, then I make so it LOOK as the result make so pay a bit MORE tax than THEY SEE it's allowed to reach by deductions    :mocking:     So far that have made them satisfied WHEN it has been something in the grey are. ((But there have been some problems in OTHER situations, when I DIDN'T manipulated anything  :lol:  E g once a law was CHANGED, so it was possible to have to pay higher tax than the earning!!!  And that change they HADN'T even listed among the changes, they had only changed INSIDE the law text!!! :bash:   As if we would read through all law texts every year... :1 (103):

[Dave Hounddriver]

I wrote yesterday (in an other topic) if a land owner don't want to lease, it can be solved by a combination of "lease", "loan" with the land as collateral

 

As I understand it, a loan must have a nominal rate of interest or it is considered a gift, and a lease must use a realistic payment amount or it can be declared void.  B.I.R. charges 30% on the gross loan interest and 25% on the gross lease payments so I cannot see a gain here, but there may be one if you use the right lawyer and the right accountant and don't end up on B.I.R.'s radar.

 

And then, again, if they don't audit you then you may be able to claim ignorance and pay nothing.

[Jack Peterson]

Did you forget me, or did you get tired by thinking of taxes?  

Thomas I did not really forget you, you are quite right in that, My Head got so full of facts and Figures, I gave up. I tend to think the OP has decided to go another route, so I felt it was pointless, losing sleep over an issue, that is so bureaucratically inept and somewhat anti everyone. Just wanting to screw people out of hard earned money (well money anyway)  :unsure: Of course, thats the Tax Man for you. The lease thing and Loan part, I see someone else has answered so maybe I will leave it there for now. As the answers for you are coming in, I feel better in myself for resting on the issue :thumbsup:

 

Have a Good day

 

 

 

JP :tiphat:

[Thomas]

 

I wrote yesterday (in an other topic) if a land owner don't want to lease, it can be solved by a combination of "lease", "loan" with the land as collateral

 

As I understand it, a loan must have a nominal rate of interest or it is considered a gift, and a lease must use a realistic payment amount or it can be declared void.  B.I.R. charges 30% on the gross loan interest and 25% on the gross lease payments so I cannot see a gain here, but there may be one if you use the right lawyer and the right accountant and don't end up on B.I.R.'s radar.

 

And then, again, if they don't audit you then you may be able to claim ignorance and pay nothing.

Where have you seen these 30/25 % tax?   Them I have seen for OTHER types of Capital gain incomes have taxes at 5 - 10 % (depending of type and sum per year.)

 

My thought is to write BOTH with specified lease fee and interest with SIMILAR sum. (A bit higher lease.)   If make so BOTH can deduct one from the other, then it isn't much left to pay tax for    :)

(I will settle rural, so big chance the land belong to a farmer  =business.  So I suppouse no big problem count both BEFORE count tax.     I will have business too, but I haven't checked all details yet, if it's best if my company will be involved in the loan - lease.)

 

Rural land are CHEAP anyway so it will be rather small interest and lease sums, so even if pay full taxes, it can be a rather cheap "insurance fee" against scammers, I believe   :)       My main thought with such solution idea is OPEN make legal documents, which make the foreigner don't own the land, but have the CONTROL.     (There are other solution with dummies, which I surely DON'T like, it's both against the MEANING of the law, and I don't want to pay them for such. And in difference from my solution idea, I doubt the dummy solutions would manage to be checked in a court case...)

[Dave Hounddriver]

Where have you seen these 30/25 % tax? 

 

The 30% tax comes from what the bank withheld on interest I earned last year.  They said they are required to deduct 30% of interest earnings and remit to the B.I.R.  The 25% came from a web site I was looking at but I cannot find it now.  These are just numbers that I use in my own estimates from my own personal experience.  Your mileage will vary.