What is Tax Residency Certificate?

The Tax Residency Certificate (TRC) is a document that proves the residency of income earners and supports their claim or eligibility for tax treaty relief. Read More This document is a must-have for taxpayers who have income sources in more than one country. Thus, it is beneficial to Domestic Corporations and resident individuals to have a TRC and present it to their customers abroad to claim treaty relief. It is equivalently beneficial to NRFCs and NRAs which may present their TRCs to Philippine-based customers to avoid double taxation. However, NRFCs and NRAs shall process their TRCs in their corresponding countries/ tax bureaus where they are registered.

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Importance of Tax Residency Certificate (NRFCs / NRAs)

In need to conclude an agreement to avoid double taxation, the Philippines entered into tax treaties with various countries. In granting the benefits of these treaties, it must be established that only residents of a Contracting State are entitled thereto.

To prove that a taxpayer is a resident and is entitled to claim the treaty benefits, the parties (countries) of the double tax agreements requires submission of a Tax Residency Certificate (TRC). The Bureau of Internal Revenue (BIR) through The International Tax Affairs Division (ITAD) is authorized to issue a TRC to Philippine residents earning income from Contracting State who intends to avail the preferential tax treatments under the tax treaties.

Therefore, A TRC is a necessary document to avoid double taxation and save from unnecessary tax payments.

Requirements to Avail a TRC or Tax Residency Certificate (RMO 43-2020)

For individuals

1. Duly accomplished BIR Form No. 1902
2. Certified true copy of the following proofs of income:
   1. Contract duly signed by both parties, if available, or any competent proof of transaction
   2. BIR-registered principal and supplementary receipts and the relevant Authority to Print Receipts and/or Invoices or Permit to Use Computerized Accounting System/Loose-leaf Receipts or Invoices
   3. Proof of remittance if the foreign source income was already received by the domestic taxpayer
3. Photocopy of the passport booklet or Residency Certificate issued by the Barangay Chairman if the applicant never left the Philippines
4. Annual ITR for the immediately preceding taxable year duly filed with, and/or received by, the BIR
5. Notarized Special Power of Attorney (SPA) or authorization letter issued by the applicant to his/her authorized representative(s), which shall expressly state the authority to sign BIR Form No. 0902 as well as to file the TRC application.

For non-individuals

1. Duly accomplished BIR Form No. 0902, which must be signed by the taxpayer or its authorized representative
2. Proof of establishment in the Philippines (e.g. latest Articles of Incorporation or Partnership)
3. Certified true copy of the following proofs of income:
1. Contract duly signed by both parties, if available, or any competent proof of transaction
2. BIR-registered invoice/receipt issued by the taxpayer to the income payor and the relevant Authority to Print Receipts and/or Invoices or Permit to Use Computerized Accounting System/Loose-leaf Receipts or Invoices and
3. Proof of remittance if the foreign source income was already received by the domestic taxpayer
4. List of partners if the applicant is a general professional partnership (GPP)
5. Annual Income Tax Return for the immediately preceding year and
6. Notarized Special Power of Attorney (SPA) or authorization letter issued by the applicant to its authorized representative(s), which shall expressly state the authority to sign BIR Form No. 0902 as well as to file the TRC application.