ANY person bringing Philippine currency in excess of P10,000 must obtain prior written authorization from the BSP through its International Department (BSP Circular No. 507 dated Jan. 19, 2006). The authorization must be obtained at any time before the entry of Philippine currency in the Philippines.
On the other hand, any person bringing foreign currency in excess of US$10,000 or its equivalent, must accomplish a Foreign Currency Declaration Form (BSP-IOD Form 1-02) pursuant to BSP Circular-Letter dated Jan. 22, 2002.
The person required to accomplish the form must furnish information on the source and purpose of the transport of such currency. Copies of the blank forms may be obtained from, completely filled, and filed with the BSP or Bureau of Customs or through airline companies and other entities involved in the transport of these currencies at any time prior to the entry of foreign currency in the Philippines (Section 2, BSP Circular-dated Jan. 22, 2002).
If the funds transferred are part of capital and not part of any compensation for any form of services rendered by any Philippine entity, the funds shall not be subject to Philippine tax.
Based on Philippine jurisprudence, capital is wealth, which is not subject to tax, while income is the profit or gain or the flow of wealth, which is subject to tax (Commissioner of Internal Revenue vs. Court of Appeals, GR 108576, Jan. 20, 1999).
On the other hand, if the funds transferred are part of the compensation for services performed by its recipient, they’re subject to tax if the services are performed in the Philippines. But if the services aren’t performed in the Philippines, then the funds aren’t subject to tax.
The failure to declare the entry of currency in excess of the aforementioned amounts in the Philippines shall subject the bearer to the sanctions in Section 36 of Republic Act No. 7653. The person responsible shall be punished with a fine of not less than P50,000 nor more than P200,000, or by imprisonment of not less than two years nor more than 10 years, or both, at the discretion of the court. In addition, the currency in question may be confiscated by the proper authorities.
* **
You may contact the author at rester.nonato@yahoo.com.