AFISCO Insurance et al vs.

CA/CTA/CIR
GRN 112675 January 25, 1999
Panganiban, J.:

FACTS:
The 41 non-life insurance corporation entered into a Qouta Share Reinsurance Treaty
with Munich, non-resident corporation. The reinsurance treaty required petitioners to
form a pool. CA ruled that the pool of machinery was a partnership taxable as a
corporation, and that the latters collection of premiums on behalf of its members was
taxable income.

ISSUE:
Whether or not the insurance pool be taxable as an incorporation and its remittances
be taxable as dividends.

RULING:
The Philippine legislative included in the concept of corporation those entities that
resembled them such as unregistered partnerships and associations. Section 24
covered unregistered partnerships and even associations and joint accounts, which had
no legal personalities apart from their individual members.
The term partnership includes a syndicate group, pool, joint venture or other
unincorporated organization, through or by means of which any business financial
operation or venture is carried on.
The pool is taxable entity distinct from the individual corporate entities of the insurance
companies. The tax on income is different from the tax on dividends received by said
companies, thus no double taxation.