Marubeni

1. Facts: dividends paid by domestic corp to resident foreign corporation was subject to tax
2. For branch profits to be subjects to be subject to BPRT, the profits must be effectively
connected with the trade or business of which the branch is licensed to do by the SEC. any
profit from any other activities is not subject to BPRT. cf 28(A)(5)

BPRT
1. 15% on whole amount
2. BPRT is only on actual and constructive remittance
a. Constructive: if hindi na iparemit sa foreign corp kasi may ireremit din yung foreign
parent corps a branch
3. Q: what if marubeni japan transfers all the assets of its Philippine branch to a transferee
corporation new co., where the stocks of newco are owned by marubeni co. this is still
constructive remittance because it is as if the branch remitted 100m to marubeni japan and
then marubeni returned it to the new co. (alternative, the branch gave the branch profit to
new co and new co issued stocks to marubeni japan)
4. Resident foreign corp not subject to IAET because there is no requirement for the branch to
issue branch profit. But MCIT applies toboth domestic and resident foreign.

Gross Philippines billing tax

1. Applies only to flights which originate from the Philippines cf 28(A)(3)

2. British airways. Since sale took place in PH, british airways was doing business in PH.

Income of estates and trusts

Estate
1. Estate shall register a TIN as a separate taxable entitiy.
a. It files it owns returns for income and for VAT.
b. Deductions, COGS, business expenses etc may also be claimed by the estate
2. Advanced share of an heir like 200k per month as allowance is subject to 6% withholding
estate tax. This is NOT the income taxation of the estate. This is a tax on the assets and
properties comprising the estate, income tax of estate is on the INCOME of the estate.
3. Q: what if the recurring income is also distributed to heirs, how is that treated? Taxable to the
heirs receiving the same but can be claimed as a deduction by the estate paying income tax.
4. When the estate becomes settled by sept 11, 2020 the estate can now file for cancellation of
registration as taxpayer
5.
Trust
1. A in anticipation of death transferred his properties in an irrevocable trust for the benefit of
his children.
a. When A transferred properties to the irrevocable trust it is considered a gift and is
subject to 6% donor’s tax.
b. Tax is like and estate in that it is a separate taxable entity
2. Distribution in accordance with the trust agreement is taxable to the beneficiaries and is
deductible from the gross income of trust.
3. If the agreement is for the trust to accumulate all the income until final distribution
a. Beneficiaries not taxable
4. If trust agreement required current distribution but the trustee does not distribute, the fact
of non-distribution does not mean that the beneficiaries do not pay any tax
5. If A has one trust for illegitimate children and one trust for legitimate children. Should trusts
be consolidated for income tax? No because beneficiaries are different
6. 2 trusts, same beneficiaries but diff kinds of properties. Do you consolidate? Yes, because
beneficiaries are the same and trsutees are the same
7. What if 2 trusts, and diff trustees. Same beneficiaries. Consolidate? No because 2 trustees.
Pension trust
1. Q: when the trust is made up of stocks or bonds is the income derived by the pension trust
taxable? No, because pensions trusts are not subject to tax on their income based on 60(B)
Exempt corporations
1. 30(E) is exclusive
2. Look into st. lukes (2 cases) and DLSU case
3. Membership dues, assessment dues, and similar dues levied on athletic clubs, and other
recreational clubs, polo clubs, are not part of taxable income nor are they part of gross
receipts for VAT purposes. This is because they constitute capital transactions by nature.
4. Non stock non-profit educational insti: