All about Philippine Business Visa 9(a) Visa otherwise known as Temporary Visitors Visa

Applicants for temporary visitor’s visa should normally apply at the Philippine Embassy or Consulate that has jurisdiction over their place of residence. While some visa applicants may apply at any Philippine Embassy or Consulate abroad, others are only allowed to apply his/her visa at the Philippine Embassy or Consulate in his country of origin or legal residence. This temporary Visitor’s Visa may be used for commercial, industrial or professional character but must be temporary in nature. Foreign nationals with Temporary Visitor Visa and who are admitted with an initial stay of thirty (30) days who seek to extend his or her stay, may apply for a visa waiver first, granting an additional stay of twenty nine (29) in the Philippines. Thereafter, the foreigner may apply for one (1) month, two (2) months or six (6) months extensions at least one week prior to the expiration of your valid stay.

The following are the minimum requirements for applying a temporary visitor’s visa:

  1. Passport/Travel Document Valid for at least six (6) months beyond the intended period of stay in the Philippines;
  2. Duly Accomplished Visa application forms;
  3. Passport Photos (2 pieces);
  4. Proof of bona fide status as tourist or businessman;
  5. Confirmed tickets for return or onward journey to the next port of destination; and
  6. Payment of Visa Fees[1]

Please be informed that an applicant cannot renew his 9 (a) Visa for more than one (1) year at any one time. However, it can be renewed multiple times for a maximum period of six (6) months every renewal.


Tax treatment of a Non-Resident Alien not engaged in trade or business (“NRA-NETB”)

Under Section 25(A)(1) of the Tax Code, if an alien stays in the Philippines for an aggregate period of more than 180 days during any calendar year, he will be considered as a Non-Resident Alien engaged in trade or business. Otherwise, he shall be classified as not engaged in trade or business in the Philippines. Thus, a mere Business Visa Holder, for instance, shall not be deemed as engaged in trade or business and therefore shall be deemed as Non-Resident Alien not engaged in trade or business (“NRA-NETB”).

As such, a Business / Tourist Visa Holder shall be taxed at twenty-five percent (25%) of their gross income, which shall be withheld and remitted by the withholding agent/payor in the Philippines as a final tax. On the other hand, a Non-Resident Aliens engaged in trade or businesses are subject to the 0%-35% progressive rates like a resident alien. Thus, a Business Visa holder who have stayed more than One Hundred Eighty (180) days in any calendar shall be deemed as engaged in trade or business and therefore will be subject to the 0%-35% progressive rates for individual taxpayers.

Is Alien-Employment Permit required for Consultants with employer abroad?

No. It is not necessary considering that Alien Employment Permit is required only for Foreigners who are seeking gainful employment in the Philippines. Gainful employment has been defined under DOLE Department Order No. 186 Series of 2017 as a state or condition that creates employer-employee relationship between the Philippine Based Employer and the foreigner. Moreover, under Section 3 Par. E of the same Department Order, those foreign nationals employed by a Foreign Service Supplier which has no commercial presence in the Philippines and who merely enter the Philippines temporarily to supply a service pursuant to a contract between his/her employer and a service consumer in the Philippines are not required to secure an AEP.   

Thus, IT Consultants with employer abroad would fall under the exclusions of the above-mentioned Department Order. Therefore, what they need to secure instead is a Certificate of Exclusion from the DOLE Regional Office. To secure such certificate, they are required to submit the following:

  1. Letter Request addressed to the DOLE Regional Director;
  2. Valid Business/Mayor’s Permit of the Philippine Based Company or enterprise;
  3. Photocopy of passport (bio page) with valid visa; and
  4. Contract of employment from the Origin company including proof of salary
  5. Service contract between Philippine based company and the Foreign company[1]

[1]               DOLE Department Order No. 186 Series of 2017, Revised Rules for the Issuance of Employment Permits to Foreign Nationals.

Tax treatment of dividends received by a Domestic Corporation from a Non-Resident Foreign Corporation.

Under the National Internal Revenue Code (“NIRC”), Domestic Corporations are taxable on its worldwide net taxable income. The applicable rate is Thirty percent (30%) including dividends received from a Foreign Entity not doing business in the Philippines. Thus, if the issuing entity is a Non-Resident Foreign Corporation (“NRFC”), the same shall be included in the Domestic Corporation’s gross income and is subject to Thirty Percent (30%) tax rate. The said rate can no longer be reduced if there is no existing tax treaty between Philippines and the foreign country.  Consequently, it is the duty of all Domestic Corporations receiving dividends or any other form of income from a NRFC to disclose the same and include it in their Gross Income.

Simply put, if a Domestic Corporation will invest funds as stockholder / corporator to a NRFC, any distribution of profits from the latter shall be deemed as corporate dividends and therefore shall be subject to tax at the rate of Thirty Percent (30%) based on our NIRC. Please note that the exemptions under the rule on “Intra-Corporate Dividends” only applies to dividends received from a Domestic Corporation by another Domestic Corporation or Foreign Corporation. It does not apply if the issuer of dividends is a Foreign Corporation. Neither the Final Withholding Tax Rate of Ten Percent (10%) would apply since the source of income is outside our jurisdiction. Our government has no power to require NRFC to withhold taxes and remit the same in our place. Consequently, for recording purposes, an increase in the cash in bank of the Domestic Corporation by way of distribution of dividends shall have a corresponding increase of income in its books for tax audit purposes.

Please note further that the above discussion applies only if Domestic Corporation will be listed in their General Information Sheet (“GIS”) as a stockholder or incorporator considering that dividends are given only to stockholders. Meaning, once the funds are invested to Foreign Entity, it must be ensured that the same shall be reflected as investments of the Domestic Corporation acting as a stockholder to apply this option.

Principle on Non-Diminution of Benefits under the Labor Code

Can your employer unilaterally change its existing policy on the use of Vacation Leave and Sick Leave stated in the original Employment Contract through a mere addendum without your consent?

In answering this question, the applicable rule is the Principle on Non-Diminution of Benefits under Article 100 of the Labor Code. Said provision explicitly prohibits employers from eliminating or reducing the benefits received by their employees. This rule, however, applies only if the benefit is based on an express policy, a written contract, or has ripened into a practice. To be considered a practice, it must be consistently and deliberately made by the employer over a long period of time. (Wesleyan University – Phils. v. Wesleyan University – Faculty and Staff Association, G.R. No. 181806, [March 12, 2014], 729 PHIL 240-252).

In our Labor Code, there is no provision requiring employers in a private enterprise to provide Vacation Leave or Sick Leave. In fact, Article 95 of the Labor Code only grants Five (5) day Service incentive leave for employees who have worked at least one year. As such, if an employer provides more than what is required by the Labor Code, the same shall be considered gratuitous which allows them to prescribe its own rules. In the same vein however, if an employer gives benefit that is more than what is required by the Labor Code, such employer cannot take this back or reduce it unilaterally. This is, again, pursuant to Article 100 of the Labor Code on prohibition against elimination or diminution of benefits which provides that:

“nothing in this Book (Book III, Labor Code of the Philippines) shall be construed to eliminate or in any way diminish supplements or other employee benefits being enjoyed at the time of promulgation of this Code (Labor Code of the Philippines).”

Note that these additional benefits may either be written in the employment contract or as part of company policies. In Central Azucarara De Tarlac v. Central Azucarera De Tarlac labor Union-NLU[1] the Supreme Court clarified that the rule against diminution of benefits apply if it is shown that the grant of the benefits is based on an express policy or has ripened into a practice over a long period of time and that the practice is consistent and deliberate.

In our given scenario, the original employment contract explicitly states that all unused Vacation Leave may be converted into cash. While in the subsequent addendum, it states there that vacation leave must actually be used by the employee, otherwise the same shall be forfeited. Also, sick leave credits may now only be used by employees for actual sick leave. This, in effect, limits the available options on how an employee could utilize her available vacation or sick leave credits. As such, if the Addendum imposes a limitation not agreed upon by the concerned employee, unilateral change of the previous policy would violate the Principle on Non-Diminution of Benefits.

Moreover, it may not be amiss to mention that when the provision of the Original Employment Contract is clear, leaving no doubt on the intention of the Employer to grant such previous beneficial option to the employee, the literal meaning of the contract provision shall govern. In fact, even if there is doubt in its interpretation, the Supreme Court has consistently ruled that employment contracts should be resolved in favor of labor or employee, as this is mandated by no less than the Constitution. Note that the contract of employment is the primary law between the employer and the employee, which will govern the parties’ respective rights and obligations. Hence, both employer and employee should complied with their contract in good faith.

Applying now the foregoing with our query, the employee may continue to assert the provisions of the original employment contract. The employer, on the other hand, cannot unilaterally impose the change in policy against its employee who refuses to sign an addendum to that effect. To do otherwise, may constitute violation of the Principle on Non-diminution of Benefits under the Labor Code.

[1]               G.R. No. 188949, 26 July 2010.

Introduce Yourself (Example Post)

This is an example post, originally published as part of Blogging University. Enroll in one of our ten programs, and start your blog right.

You’re going to publish a post today. Don’t worry about how your blog looks. Don’t worry if you haven’t given it a name yet, or you’re feeling overwhelmed. Just click the “New Post” button, and tell us why you’re here.

Why do this?

  • Because it gives new readers context. What are you about? Why should they read your blog?
  • Because it will help you focus you own ideas about your blog and what you’d like to do with it.

The post can be short or long, a personal intro to your life or a bloggy mission statement, a manifesto for the future or a simple outline of your the types of things you hope to publish.

To help you get started, here are a few questions:

  • Why are you blogging publicly, rather than keeping a personal journal?
  • What topics do you think you’ll write about?
  • Who would you love to connect with via your blog?
  • If you blog successfully throughout the next year, what would you hope to have accomplished?

You’re not locked into any of this; one of the wonderful things about blogs is how they constantly evolve as we learn, grow, and interact with one another — but it’s good to know where and why you started, and articulating your goals may just give you a few other post ideas.

Can’t think how to get started? Just write the first thing that pops into your head. Anne Lamott, author of a book on writing we love, says that you need to give yourself permission to write a “crappy first draft”. Anne makes a great point — just start writing, and worry about editing it later.

When you’re ready to publish, give your post three to five tags that describe your blog’s focus — writing, photography, fiction, parenting, food, cars, movies, sports, whatever. These tags will help others who care about your topics find you in the Reader. Make sure one of the tags is “zerotohero,” so other new bloggers can find you, too.