Filing Income Tax for Seamen and OFW: What is Form 1703?

I’ve been working as a seafarer for more than three years already and our tax laws are very good to people like us working abroad or commonly known as Overseas Filipino Workers. We enjoy tax-free salaries because the law states so, provided that all incomes are obtained outside the country.

So for three years I have never seen any BIR form for filing my income tax return. Unlike when I was working at a semiconductor company here in the Philippines where our HR updates us always about our ITR forms.


But recently I visited the website of Bureau of Internal Revenue (BIR) just to check for anything worthwhile, then I stumbled to this downloadable Form 1703 from their site. The name of the form caught my attention. It’s entitled “Annual Income Information Return for Non-Resident Citizens / OCWs and Seamen (for foreign-sourced income). The first thought that came into my mind was, “Oh no, I thought we are exempted? I might be in trouble! Penalties!”. Knowing that the campaign of BIR against those tax evaders is very strong, it really made me research about it instantly.


So I googled other blogs, social sites, threads, and actually read some taxation laws just to be clarified about this Form 1703. And here’s what I’ve gathered. Some netizens shared that they have tried filing Form 1703 but they were instructed by BIR officials that OFWs doesn’t need to file income tax. Maybe this Form 1703 is also not clear to some BIR staff. Some also say that Form 1703 is obsolete. But why it is still on BIR’s website?

source: www.bir.gov.ph

BIR Form No. 1703
Annual Income Information Return for Non-Resident Citizens / OCWs and Seamen (for foreign-sourced income)
Description
This information return is filed in triplicate by Non-resident citizens and Overseas Contract Workers (OCWs), including qualified Filipino seamen, on income derived from sources abroad.
An individual citizen of the Philippines who is working and deriving income from abroad as an overseas worker is taxable only on income from sources within the Philippines. Income from sources within the Philippines should be filed in either Form 1700 or Form 1701.
Filing Date
This information return is filed not later than the April 15 of the year following the taxable year in which the income was earned.

Based from the information I’ve gathered, it seems that this Form 1703 is neglected often. Honestly, I’m also not aware of this form before this post. But in my own opinion filing this Form 1703 has its own pros in the future especially when getting a loan which requires your ITR history.

As the name of the form says, it is only an annual income information return for foreign-sourced income. The BIR only wants to know how much you are earning from foreign sources and they will not tax you for it. The declaration of foreign-sourced income will only justify where did you get the money for buying that elegant car or huge house, etc. Anyway, filing this Form 1703 will cost you a small fee or even none (not sure about the fee but I will try to file next year to know it firsthand) as long as you only get your income outside the country.

So for you guys out there, you can post at the comment section for more information about this Form 1703. Your inputs are highly appreciated!

Disclaimer:
Some information above was taken from their respective sources. I don’t own it in any way, I’m just sharing it to the people who might need it. On the date of posting the information given is the latest from the specific sources. Updates from the sources may not reflect to this post on the later date unless otherwise stated.

Copyright 2016 by PinoyMariner at www.pinoymariner.com

Anvin Argañosa

An Electronics Engineer by profession. A land-based worker turned into an ocean dweller. An "aspiring" business tycoon and financial advocate. A loving father to my daughter Julian. And a very obedient husband to Ann (wink!).

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