Personal exemptions are arbitrary amounts allowed for personal,living, or family expenses of the taxpayer. The amount is 50 000 pesos for each individual taxpayer. In case of married individuals where only one spouses is deriving gross income, only such spouse allowed to claim the personal exemption.
Taxpayers allowed for personal exemptions:
3. Non Resident Aliens engaged in trade or business in the Philippines on the basis of reciprocity.
Conditions for Non Resident Alien Engaged in Trade or Business for claiming personal exemptions:
- The foreign country of which the NRA ETB is a subject or citizen has income tax law allowing Filipino citizen to claim personal exemption.
- The amount equal to the exemptions allowed by the income tax law of foreign country or income tax law of our country whichever is lower.
*Non Resident Alien not engaged in Business not allowed for personal exemption being taxable on Gross Income.
Additional Exemption – 25 000 for each legitimate, recognized illegitimate or legally adopted child chiefly dependent upon and living with the taxpayer.
- Must be living with the taxpayer
- Must be dependent upon the taxpayer for chief support.
- Not more than 21 years old or regardless of age but physically and mentally defective.
- Not gainfully employed
*If any dependents marries, dies, get married or gain employment during the taxable year, the taxpayer may still claim the additional personal exemption on the same year.