Corporate

Income Taxpayers
 The term “corporation” shall include one person
corporations (OPCs), partnership, no matter how created or
organized, joint stock companies, joint accounts, association, or
insurance companies, except general professional partnership and
a joint venture or consortium formed for the purpose of
undertaking construction project or engaging in petroleum, coal,
geothermal and other energy operations pursuant to an operating
consortium agreement under a service contract with the
government.
 Hence, the term corporation includes profit-oriented and
non-profit intitutions such as charitable institutions, cooperatives,
government agencies and instrumentalities, associations, leagues,
civic or religious and other organizations
Domestic Corporation
- is a corporation that is organized in accordance with
Philippine laws. It includes one-person corporation (OPC)
owned and registered by resident citizens in the Philippines.

Foreign Corporation
- a foreign corporation is one organized under a foreign law.
 Types of Foreign Corporations
1. Resident Foreign
Corporation (RFC) - a foreign
corporation which operates and
conduct business in the
Philippines through a
permanent establishment (i.e. a
branch)
2. Non-resident Foreign
Corportion (NRFC) - a
foreign corporation which
does not operate or conduct
business in the Philippines.
NOTE:
1. A corporation that incorporates in the Philippines is a domestic corporataion
under the Incorporation Test even if the same is controlled by foreigners
2. A foreign corporation that transacts business with residents through a resident
branch is taxable on such transactions as a resident foreign corporation through
its branch. However, it is transacts directly to residents outside its branch, it is
taxable as non-resident foreign corporation on the direct transaction.
3. An individual that establishes a one-person corporation (OPC) shall be taxable
as a corporate taxpayer for the businesstransaction of the OPC, but shall be tax
as an individual for his personal transaction.
Special Corporation
- are domestic or foreign corporation which are subject to
special tax special tax rules or preferential tax rates
Other Corporate Taxpayers
1. One-person Corporation
- is a single stockholder who may be a natural person, trust or an
estate.
- Banks and quasi-banks, preneed, trust, insurance, public and
publicly-listed companies, and non-chatered GOCCs may not be
incorporate as One-Person corporation. A natural person who is
licensed to exercise a profession may not organized as a OPC for the
purpose of exercising such profession except otherwise provided
under special laws.
2. Partnership
- is a business organization owned by two or more persons who
contribute their industry or resources to a common fund for
the purpose of dividing the profits from the venture
Types of Partnership

a) General Professional Partnership (GPP)

A GPP is a partnership formed by persons for the sole
purpose of exercising a common profession, no part of the
income of which is derived from engaging in any trade or
business.
 A GPP is not treated as a corporation and is not a taxable
entity. It is exempt from income tax, but the partners are taxable
in their individual capacity with respect to their share in the
income of the partnership.

b. Business Partnership
- is one formed for porfit. It is taxable as a corpotion
Examples:

a. A partnership between Atty. Mendoza, a lawyer, and Mark

Santos, an accountant, to practice in taxation advisory
services would be a business partnership since the two
partners are not in the same profession.
b. A partnership between accountants Khim and Vhinson to
verture into a beauty parlor would be a business partnership
since the venture is not in practice of a common profession.
 c. A partnership between accontants Juan and Miguel to venture
into audit services would be a general professional partnership.

d. Dentists Wency and Andy partnered to oparete a dental

During slack season, they are converting their clinic into a
beauty saloon.Their partnership is a business partnership since
it is earning income from business.
3. Joint Venture:

- is business undertaking for a particular purpose. It may be

organized as a partnership or a corporation

a. Exempt Joint Venture

- are those formed for the purpose of undertaking construction
projects or engaging in petroleum, coal, geothermal and other
energy operations pursuant to an operating consortium
agreement under a service contract with the Government.
- Similar to a GPP, this type of joint venture is not treated as a
corporation and is tax-exempt on its regular income, but their
venturers are taxable to their share in the net income of the
joint venture

b. Taxable Joint Venture

- all other joint ventures are taxable as corporation
 4. Co-ownership
- is joint ownership of a property formed for the purpose of preserving the
same/or dividing its income.
- A co-ownership that is limited to property preservation or income
collection is not taxable entity and is exempt, but the co-owners are
taxable on their share on the income of the co-owned property.
- However, a co-ownership that reinvest the income of the co-owned
property to other income-producing properties or ventures, will be
considered an unregistered partnership taxable as a corporation
The General Rules in Income Taxation
Taxable on Income Earned

Individual Taxpayers Within Without

Resident Citizen * *

Non Resident Citizen *

Resident Alien *

Non Resident Citizen *

The General Rules in Income Taxation

Taxable on income earned

Corporate Taxpayers Within Without
Domestic Corporation * *
Resident Foreign Corporation *

Non-resident Foreign *
Corporation
Thank You
and
Godbless