mikemike

I read this as taking a business context and bias. , yes, pensioners are mentioned and then in the last paragraph suggests it maybe open to ''interpretation'' there is no mention of the treaty establishing the double taxation agreement being revoked.

The BIR may have been lenient in the issuance of TRCs in the past but due to the continuous in flock of foreign nationals and foreign corporations that do business in the Philippines, the BIR is now stringent in implementing the policies and guidelines mentioned in the RMO. Through this issuance, the BIR aims to award treaty benefits to qualified applicants, based on its interpretation.

Roam123

Thanks MikeMike for your comment on this RMO No. 51-2019 issue. The danger, as far as I see it, is even with the double taxation agreement in place, if ability to obtain a taxation/residency document acceptable to HMRC then pension income will be taxed in the UK. But as QuiltMan kindly pointed out, the PRA still promotes the SRRV based on pension income being non-taxable,

quiltman

When I asked HMRC about the double taxation treaty and they said they needed proof of tax registration here, I asked the PRA how to cover this and it was them that referred me to the BIR for a TIN. I needed ID of course plus a barangay certificate confirming residency and that was all - well except for a passport size photo.
You are correct that without some form of tax registration here, HMRC will not instruct your private pension providers to pay your pension gross. State and government pensions are of course excluded from the double taxation treaty.
I will be at the PRA later this week to renew my SRRV so I'll ask them what they see the current situation to be. I'll post their response in due course.

quiltman

Just remembered that the BIR said, years ago, that a TIN did mean I was registered for tax here, but under the SRRV I would not pay tax on monies remitted to the Philippines, BUT if I worked here ,or earnt money here, then YES I would be taxed locally. Makes a lot of sense now!

mikemike

''the PRA still promotes the SRRV based on pension income being non-taxable''

and they are correct once received here the pensions will not be subject to local taxes as all pensions are exempt from taxes/ what the PRA cannot do is exempt overseas pensions being taxed at source as it is not under the remit of the BIR.

Thankfully I still have time on my side to sort this out one way or another. Perhaps an email to the U:k embassy to highlight what appears to be a universal abrogation of the double tax agreement may have been imposed.

Roam123

Yes, it appears that even though there is the double taxation agreement HMRC will still require acceptable evidence of different tax residency before issuing instructions to UK based private &/or company pension providers not to deduct income tax at source. Hopefully TIN is still acceptable, as quiltman used that in the past.

Roam123

That was my understanding too, before I came across the mentioning of the so-called RMO 51-2019 document. Should also apply to holders of a 13a visa too as well as SRRV if my understanding is correct.
Also, my understanding is that Filipino citizens who have previously lived/worked in UK and have private pensions paid from there can apply to HMRC to have them paid gross at source, but they are still liable to pay tax in Philippines because citizens pay tax on worldwide income while foreigners do not. Known as a 'territorial tax system' that only a few countries around the world implement and Philippines appears to have a slightly adjusted version of. UK operates a 'residency based tax system'

Link to list of countries and how they tax their citizens & non-citizens. There is a useful table if you scroll down its page a little. Next to Philippines is the note :"Residence-based taxation of citizens, territorial taxation of foreigners"

https://en.wikipedia.org/wiki/International_taxation

Roam123

That would be very useful. Thank you.

mikemike

I think the TIN with a 13a or pra approved retirement visa will be the evidence needed.

the part i remain confused over is how does the Uk government communicate the amounts payable to the Philippines SSs system for distribution or will the Uk gov just send funds without the UK personal allowances being offset

Roam123

A couple of years ago I contacted the 'International Pension Centre' - a branch of UK government, based in Wolverhampton, on behalf of a friend's Filipina aunty who had worked in the NHS but was now retired in Philippines. She had been getting her NHS and UK state pensions paid into her Barclays bank account based in the UK and had been using her debit card in Philippines to withdraw the funds. But Barclays found out that she was now living overseas and closed her account, hence the problem.

As far as I can remember there were a couple of forms that had to be completed and couriered from Philippines to 'International Pension Centre' (I think the address may be The Pension Service 11, Mail Handling Site A, Wolverhampton, WV98 1LW, United Kingdom).

The aunty provided her Philippines bank details and now automatically receives her pension in Php after foreign exchange fee deducted). I believe that taxes due are deducted at source in UK and based on her personal allowance tax code.

Applicable links:
https://www.gov.uk/international-pension-centre
https://secure.dwp.gov.uk/ipc/personal-details

mikemike

so it is back to the double tax arrangement if any. so the Uk pension gets paid here instead of Uk, so the Uk personal allowance is not used against state pension income when other uk based pensions are using up the UK personal allowance

Roam123

As far as I am aware UK state pension and other government pensions (NHS, teachers, police, etc.) will always be subject to tax in the UK, with personal allowance taken into account, and then paid out to either a UK based bank account (some banks are closing non-UK resident accounts once they become aware of non-residency) , or to a foreign bank account if the owner of the pension has filed the required paperwork with the International Pension Centre.

If you have a private pension or any other non-government pension, and provide suitable evidence to HMRC of tax residency in an applicable double tax agreement country, then HMRC will arrange for the pension provider to pay the pension income gross. The pension provider may pay out to a foreign based bank, but I think that most will not (maybe this is where a pension transfer is required?), so UK type sort code and account number is likely required. The pension owner is then subject to tax on the pension in country of tax residency based on their own rules.

It is quite complicated (I think tax is deliberately meant to be) and the above is based on my own understanding, but could well be flawed.

Bealinehx

All four of my pensions, one state and three private are paid directly into my Philippine account without any problem.

mikemike

getting them paid into a philippines bank account has never been the problem. The challenge has been to have them paid gross of UK income tax, or paid by the SSS here in the philippines

Has anyone tried receiving pension benefits via the local sss

Roam123

Good to hear that you have no issues receiving pension income locally. One of my pension providers has informed me that they will want to close my account once I become non-resident in UK. I can transfer it to one of my other providers who offer to do the non-residency admin stuff for £45 per year.