Non-Resident Citizen
Updated June 13, 2026
Definition
A Non-Resident Citizen (NRC) is a Filipino citizen who shows a definite intention to reside abroad, leaves to live abroad as an immigrant or for permanent employment, or works abroad in a job that keeps them physically outside the Philippines most of the year. An NRC pays Philippine income tax only on income from sources within the Philippines.
The National Internal Revenue Code defines a nonresident citizen in Section 22(E). A Filipino citizen is an NRC if they (1) establish to the satisfaction of the Commissioner their physical presence abroad with a definite intention to reside there; (2) leave the Philippines during the year to reside abroad as an immigrant or for employment on a permanent basis; or (3) work and earn income abroad in employment that requires them to be physically present abroad most of the time during the taxable year. A former NRC who returns to reside permanently is still treated as an NRC for the year of arrival, for foreign income earned before the arrival date. The key distinction is taxation scope: a resident citizen is taxed on income from all sources, while an NRC is taxed only on income from sources within the Philippines (NIRC Sec. 23(A) and 23(B)). Overseas contract workers are likewise taxed only on Philippine-source income (Sec. 23(C)). Status is determined for each taxable year. A citizen who was an NRC in 2025 can be a resident citizen in 2026 after returning to live in the Philippines.
Why it matters
NRC status decides whether the Philippines taxes your foreign income. As an NRC you pay Philippine income tax only on Philippine-source income, such as rent from a property in Manila or dividends from a Philippine company. This matters for OFWs, emigrants, and citizens working abroad on long-term contracts. Getting the classification wrong can mean unpaid tax on income that should have been reported, which carries a 25% surcharge and 12% annual interest, or paying tax that was not due.
How it works
NRC determination follows these steps: 1. **Check the NIRC tests**: Do you live abroad with a definite intention to reside there, did you leave to live abroad as an immigrant or for permanent employment, or does your job abroad require you to be physically abroad most of the year? 2. **Keep proof**: Immigration or permanent residence papers, employment contracts showing work abroad, and travel records support NRC status 3. **Identify income sources**: Classify each income as Philippine-source or foreign-source under NIRC Sec. 42. Pay for services is sourced where the work is performed; rent is sourced where the property is 4. **Calculate tax liability**: Apply Philippine tax only to Philippine-source income, using the graduated rates or the final tax rates that apply to that income 5. **File the right return**: Use BIR Form 1700 for Philippine-source compensation only, or BIR Form 1701 or 1701A for Philippine-source business or rental income Income subject to final tax, such as dividends from a domestic corporation, is settled through withholding and is not reported again on the annual return.
Examples
OFW in Dubai
Maria works in Dubai under a two-year contract that keeps her abroad except for a 15-day vacation in July. She earns ₱2,000,000 in Dubai and ₱50,000 from renting out a room in Manila. Status: NRC (her employment requires her to be abroad most of the year). Philippine-source income: ₱50,000 rental only. Her Dubai salary is foreign-source and not taxed in the Philippines (NIRC Sec. 23).
Student Abroad with Part-time Work
Juan studies in Canada for 10 months and earns ₱300,000 doing online freelance work for Philippine clients while in Canada. He spends 45 days in the Philippines during summer break. Status: studying abroad alone does not meet the NRC tests unless he can show a definite intention to reside abroad. If he is an NRC, fees for work he performed in Canada are foreign-source under NIRC Sec. 42, even though his clients are Philippine; if he remains a resident citizen, all his income is taxable in the Philippines.
Returning Resident
Ana worked overseas for 3 years as an NRC. In 2026, she returns to live in the Philippines permanently and keeps her foreign job, working remotely. Status: NRC for 2026 only for her foreign income up to her arrival date; from arrival she is a resident citizen and taxed on income from all sources, including the remote foreign job (NIRC Sec. 22(E)(4) and 23(A)).
Business Owner Abroad
Carlos has lived in Singapore for years with a definite intention to stay and manages his business there. He owns shares in a Philippine corporation that pays him ₱400,000 in dividends. Status: NRC. His Singapore business income is not taxed in the Philippines. The ₱400,000 dividends from a domestic corporation are subject to a 10% final tax, ₱40,000, withheld by the corporation (NIRC Sec. 24(B)(2)).
Common Mistake - Tourist Visa Holder
Lisa, a Filipino citizen, thinks her visa type abroad decides her tax status. She lives abroad most of the year and works remotely for Philippine companies. Visa type does not decide NRC status; the NIRC tests do. If she is an NRC, pay for work she performs while abroad is foreign-source under NIRC Sec. 42, even when the employer is a Philippine company, while pay for work done during her days in the Philippines is Philippine-source and taxable.
Common misconceptions
- Myth: Having a Philippine address makes you a resident citizen. In fact, NRC status depends on the NIRC tests of intent to reside abroad, emigration or permanent employment abroad, or work that keeps you abroad most of the year
- Myth: Working for a Philippine company abroad means you're taxed as resident. In fact, location of work, not employer, determines income source
- Myth: Tourist visa status affects NRC classification. In fact, the NIRC tests decide NRC status, not the type of visa you hold abroad
- Myth: Spending any 183 days abroad automatically makes you an NRC. In fact, the NIRC tests look at intent to reside abroad, emigration or permanent employment, or work abroad that requires you to be there most of the year
- Myth: NRCs never pay Philippine taxes. In fact, NRCs still pay tax on Philippine-source income
Questions people ask
What is a Non-Resident Citizen?
A Non-Resident Citizen is a Filipino citizen who lives abroad with a definite intention to reside there, left to live abroad as an immigrant or for permanent employment, or works abroad in a job that requires them to be physically abroad most of the year (NIRC Sec. 22(E)). NRCs pay Philippine income tax only on Philippine-source income.
How many days outside Philippines make you a Non-Resident Citizen?
The NIRC does not set a fixed day count for citizens. The tests are intent to reside abroad, leaving as an immigrant or for permanent employment, or employment abroad that requires physical presence abroad most of the time during the taxable year (NIRC Sec. 22(E)).
Why does Non-Resident Citizen status matter for taxes?
NRC status determines the scope of your tax. NRCs pay Philippine tax only on Philippine-source income, while resident citizens are taxed on income from all sources (NIRC Sec. 23).
Do Non-Resident Citizens pay tax on all income?
No. NRCs pay Philippine income tax only on Philippine-source income, such as pay for work performed in the Philippines, rent from Philippine property, and dividends from domestic corporations. Income from sources abroad is not taxed in the Philippines.
Can I be NRC one year and Resident Citizen the next?
Yes. Status is determined for each taxable year. A citizen who returns to live permanently in the Philippines becomes a resident citizen from arrival, though foreign income earned before the arrival date in that year is still treated as an NRC's (NIRC Sec. 22(E)(4)).
What's the difference between Non-Resident Citizen and Non-Resident Alien?
Non-Resident Citizens are Filipino citizens living or working abroad, while Non-Resident Aliens are foreign nationals whose residence is not in the Philippines. Both are taxed only on Philippine-source income, but nonresident aliens are taxed under NIRC Sec. 25, which has its own rates, such as the 25% final tax on those not engaged in business.
How do I show I am a Non-Resident Citizen?
Keep documents that match the NIRC tests, such as proof of immigrant or permanent residence status abroad, an overseas employment contract, and passport or travel records showing your time abroad.
What income is considered Philippine-source for NRCs?
Philippine-source income includes pay for services performed in the Philippines, rent from property located in the Philippines, business income from Philippine operations, and dividends from domestic corporations (NIRC Sec. 42).
Do OFWs automatically qualify as Non-Resident Citizens?
An OFW whose employment requires being physically abroad most of the year meets the NIRC test, and overseas contract workers are taxed only on Philippine-source income (NIRC Sec. 22(E)(3) and 23(C)). OFWs who earn income solely from abroad are not required to file an income tax return (NIRC Sec. 51(A)(2), as amended by RA 11976).
What happens if I miscalculate my Non-Resident Citizen status?
If you were in fact a resident citizen, tax on unreported income becomes a deficiency, with a 25% surcharge and 12% annual interest (NIRC Sec. 248 and 249). If you paid tax that was not due, you can claim a refund within the period the law allows.
Next steps
Learn more
Days In Philippines Calculator
Philippine Income Tax Calculator For NRCs
OFW Tax Calculator
BIR Form 1700 Annual Income Tax Return For Individuals
BIR Form 1701 Annual Income Tax Return For Self Employed And Mixed Income Individuals
BIR Form 2316 Certificate Of Compensation Payment/Tax Withheld
Complete Guide To Philippine Source Income
OFW Tax Guide 2026
Related content
Calculators
Tax types
Taxpayer guides
Guides
Glossary
Sources & References (2)
Primary sources and the laws, regulations, and official issuances this page relies on. Each citation links directly to the issuing authority’s document.
- LawPhil Project (Arellano Law Foundation). “NIRC §22(E), §23 (non-resident citizen, PH-source income): full text.” lawphil.net. NIRC of 1997 (RA 8424), Sec. 22(E)/23. Accessed .