Will TRAIN Law Affect The Remittance Of Overseas Filipino Workers?

Will TRAIN Law Affect The Remittance Of Overseas Filipino Workers?

Will the new Tax Reform for Acceleration and Inclusion (TRAIN) law affect the remittance of the Overseas Filipino Workers (OFWs)?

Previously, the Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion bill has been already signed and approved by President Rodrigo Roa Duterte, which took effect since January 01, 2018.

The newly approved law aims to generate revenue to fund a multi-billion dollar infrastructure program and it is also the first package of Duterte administration most anticipated tax reform program.

The new tax reform program will increase the take-home pay of most Filipino wage earners.

TRAIN act’s Section 57 has doubled the DST per P200 worth of transaction such as transferring of money to the country from 30 to 60 centavos.

However, the Bureau of Internal Revenue (BIR) has issued Revenue Regulations No. 11-2012 exempting the remittances of the OFWs from paying DST.

The OFWs must present valid proof entitlement such as  Overseas Employment Certificate, valid Overseas Workers Welfare Administration membership certificate, or electronic receipt issued by the Philippine Overseas Employment Administration to be exempted from paying DST.

“Valid proof of entitlement” must be secured by the OFW from the POEA or OWWA, and must be used by the recipient of remittances to avail the DST exemption. If the remittances were sent through a bank and withdrawn through an automatic teller machine, or sent through “non-bank money transfer agents,” BIR said quoted by Philstar.

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