o Joint stock companies, o Joint accounts o Associations o Insurance companies o Partnerships For income tax purposes, a corporation DOES NOT INCLUDE: o General professional partnerships and o a joint venture or consortium formed to undertake construction projects or engage in petroleum, coal, geothermal and other energy related operation, pursuant to an operating or consortium agreement under a service contract with the Government. (NOTE: As a general rule, a joint venture is legally considered as partnership and is generally taxable as a corporation. The exception is the one stated just above.)
CLASSIFICATION OF CORPORATE TAXPAYERS
A. DOMESTIC CORPORATION one organized and existing under Philippine laws. - It is taxable on all income from sources within and outside the Philippines - Classifications: o Domestic corporations in general, including partnerships other than general professional partnerships; o Proprietary educational institutions and hospitals; o Government-owned or controlled corporations, agencies or instrumentalities. B. FOREIGN CORPORATION a corporation organized and existing under the laws of foreign country irrespective of the nationality of its stockholders - Taxable only on income from sources within the Philippines - May either be a Resident Foreign Corporation or a Nonresident Foreign Corporation o Resident Foreign Corporation foreign corporation that is engaged in business or trade in the Philippines. It includes: Resident foreign corporations in general; International carriers; International air carriers; Offshore banking units; Regional or area headquarters and regional operating headquarters of multinational companies o Nonresident foreign corporation does not engage in business or trade in the Philippines. It includes: Non-resident foreign corporation in general;
Non-resident cinematographic film owners, lessors or
distributors Non-resident owners of vessels chartered by Philippine nationals; and Non-resident lessors of aircrafts, machineries and other equipment - Its earnings are derived from fixed determinable income from sources within the Philippines that are enumerated in the Tax Code as follows: Interest, dividends, royalties; Rent, salaries; Premiums, except reinsurance premiums; Annuities, emoluments or other fixed or determinable annual, periodic or casual gains, profits and income; and Capital gains, except capital gains from the sale of shares of stock not traded in the stock exchange of a domestic corporation. C. REGISTERED AND UNREGISTERED PARTNERSHIPS AND OTHERS TREATED LIKE CORPORATIONS
TAX EXEMPT CORPORATIONS
Income received by the following corporations shall be exempted from tax: a. Government educational institutions b. Non-stock and nonprofit educational institutions c. Nonprofit labor, agricultural or horticultural organizations d. Associations of farmers, fruit growers, and the like whose primary function is to market the product of their members. e. Organizations with a purely local operation whose income is derived only from assessments, dues, and fees collected from their members to meet operational expenses such as fire insurance company, farmers or other mutual typhoon asosciations, mutual ditch or irrigation company and mutual or cooperative telephone company. f. Non-stock corporation or association organized and operated exclusively for religious, charitable, scientific, athletic, or cultural purposes or for the rehabilitation of veterans; provided that no individual person owns its assets or no individual person receives benefits on its earnings. g. Non-stock/nonprofit mutual savings bank or non-stock/nonprofit cooperative bank. h. Nonprofit civic league or organization operating exclusively for the promotion of social welfare. i. Cemetery company owned and operated exclusively for the benefit of its members j. Nonprofit business league, chamber of commerce, or board of trade. k. Associations, orders, beneficiary societies operating for the exclusive benefits of their members.
INCOME TAXES OF CORPORATIONS
1. Normal Corporate Income Tax (NCIT) starting January 1, 2009 = 30% based on net taxable income; 2. Minimum Corporate Income Tax (MCIT) 2% of the gross income; 3. Optional Gross Income Tax (OGIT) Optional effective January 1, 2000 if requirements are met; 4. Capital Gains Tax on sale of real property or on sale of shares of stock; 5. Final tax on passive income