University of Cebu School of Law

LAW 311 – TAXATION I

Quiz No. 2 (Open Notes Exam)

SCENARIO

Your Senior Associate in the law firm that you are working in asks you
to research on the possible investment vehicles that may be considered
by the firm’s client, a foreign multinational corporation that is planning
to do business in the Philippines. Among the investment vehicles being
considered are the following: Local Subsidiary, Branch Office of a
Foreign Corporation, Representative Office, Regional Area
Headquarters, and Regional Operating Headquarters.

The following are the client’s queries:

1. What are the differences between setting up a local subsidiary in

the Philippines and setting up a Philippine branch office of a
foreign corporation? Please include distinction(s) as to tax
implications.

2. What are the requirements for establishing a representative office

in the Philippines? Is a representative office subject to income tax
in the Philippines?

3. Distinguish a Regional Area Headquarter (RHQ) from a Regional

Operating Headquarter (ROHQ), including tax implications, if any.
Does the enactment of Republic Act No. 11534 or the CREATE
Law have an impact on the taxability of RHQs and ROHQs?

INSTRUCTIONS

Prepare a Research Memorandum (addressed to your Senior

Associate) which contains the discussions and responses to the foregoing
queries of the firm’s client.

The Research Memorandum must be typewritten (“computer-typed”) in

a Word file (or similar file) using font size number 12 (any font type).
Kindly submit/upload the Research Memorandum (in Word or PDF file)
to Schoology not later than 11:00PM of October 31, 2022 (Monday).
 [Sample Format of a Research Memorandum]

RESEARCH MEMORANDUM

TO: [Name of Your Senior Associate] (Note: You may put any name you want)

FROM: [Your Name]

RE: [Subject Matter]

DATE: [Date of Submission of the Research Memorandum]

[Discussion and Responses to Client’s Queries]