Senate OKays OFW-related accords with Brunei, SoKor

The Senate on Wednesday ratified two agreements between the Philippines and the governments of Brunei Darussalam and South Korea, the first easing the tax burden on overseas Filipino workers (OFWs) and the second giving them better access to social security services in their host country.

With 22 senators voting yes and with no objections, the chamber approved Senate Resolution No. 790 removing the tax imposed on the income sent by OFWs in Brunei to their families in the Philippines.

Senate Resolution No. 878, on the other hand, ratified an agreement with South Korea allowing Filipino workers access to social security benefits in that country. It reciprocates by extending the same accommodation to South Koreans working in the Philippines.

Double taxation

The Senate did away with the three-reading rule to have the agreements ratified in just two days and before Congress goes on a Christmas break.

In her sponsorship speech on Tuesday, Sen. Imee Marcos, chair of the Senate committee on foreign relations, explained the rationale for the Philippine-Brunei Darussalam Double Taxation Avoidance Agreement.

“It is high time for us in the Senate to amend the pathetic adage commonly uttered by our OFWs: ‘I went abroad to earn to have something to send to my family; when I returned home, I still have ample earnings because only a little was deducted,” she said.

“Let us make the coming Christmas celebration merry and bountiful for our OFWs by ratifying this double taxation avoidance agreement,” Marcos added.

Cross-border remittances

Under the agreement, business profits will be taxed only in the state where the company is doing business unless that company has a permanent establishment in the other state.

“Professional services rendered by lawyers, engineers, architects, dentists and accountants, shall be taxed only in the worker’s state of residence, provided he or she does not stay for an aggregate period of over 183 days in any 12-month period,” Marcos said.

Professors, teachers and researchers who are invited by any educational institution in the other contracting state shall be exempted from that state’s income tax.

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“Cross-border remittances for a student’s or a trainee’s maintenance, education, study, or training shall be exempt from tax, as well as, on the grants, allowances, and awards given to them abroad,” she added.

Basic safety nets

Meanwhile, the agreement with South Korea seeks to address a problem faced by Filipino migrant workers who are excluded from social security coverage or do not enjoy full welfare benefits in that country.

“Most labor-receiving states do not cover nationals and foreign workers under their social security schemes, leaving our overseas workers with no access to basic safety nets while they work abroad,” Marcos said.

The Philippines-South Korea agreement would add to the social security agreements earlier forged by the government with 15 other countries, the senator noted.

“We often take pride in our OFWs as our modern-day heroes, but their lament is always, ‘if we’re really heroes, do we need to suffer for us to earn our right to be buried at the Libingan ng mga Bayani?” she said. INQ