Resident Citizen-All income earned by Filipino citizens with permanent residence in the Philippines,

whether inside or outside the country, is subject to taxation.

Non-Resident Citizen-This person reports himself as having spent 183 days outside of the Philippines and
having received approval from the CIR for his desire to live abroad. OFWs are categorized as NRCs and
are only taxed on income derived from domestic sources in the Philippines.

Resident Aliens-a person residing in the Philippines but not being a citizen of the Philippines People who
have lived in the Philippines for longer than a year are also considered RAs.

Non-Resident Aliens-People who reside in the Philippines but are not citizens

Nonresident aliens engaged in trade/business-NRA who reside in the Philippines for more than 180 days
but less than a year throughout the tax year and generate business income there.

Non-resident aliens not engaged in trade/business- People that spent more than 180 days in the
Philippines without earning a living through their businesses there

Importance of classification-The purpose of classification is to identify the tax payers and the applicable
tax rate.

For tax purposes define who is classified Filipino citizens- Citizens who pay taxes on all of their income
earned within the Philippines are considered resident citizens because they live there permanently.