Corporate Income Tax

Question 1

What are considered as corporations or treated as corporate taxpayers under the tax code?

Answer 1

Corporations in the tax code are those corporations formed and organized under the revised corporation code

1. Partnerships
2. Joint-stock
3. Joint Accounts
4. association
5. Insurance Companies

Question 2

General professional partnerships

Answer 2

NOT a corporation for tax purposes

the distributive share of each partner shall form the partner’s gross income in his individual income tax return subjected individual income tax rates

Question 3

joint venture or consortium

Answer 3

NOT a corporation for tax purposes

formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal, and other energy operations pursuant to an operating or consortium agreement under a service contract with the government

Question 4

Domestic Corporations

Answer 4

Formed and organized under the laws of the Philippines

Question 5

Special Domestic Corporations

Answer 5

1. Proprietary educational institutions
2. Proprietary Hospitals

Question 6

Resident Foreign Corporation

Answer 6

permanent establishment in the Philippines

Question 7

Regional operating headquarters

Answer 7

extension of a corporation allowed to derive income in the Philippines by performing qualifying services to its head office, affiliates, subsidiaries or branches in the Asia-Pacific (APAC) region and other foreign markets

Question 8

offshore banking units

Answer 8

A branch, subsidiary, or affiliate of a foreign banking corporation which is duly authorized by the central bank of the Philippines to transact offshore banking business in the Philippines

Taxed at 10% of Gross Income

Question 9

International Carriers

Answer 9

foreign airlines

1/2% of gross Philippines Billings

Question 10

Minimum Corporate Income Tax (MCIT)

Answer 10

2% of the gross income of the corporation

Question 11

MCIT is compared with regular coroporate income tax beginning on the ________ of the business operations

Answer 11

4th year

Question 12

Why is there MCIT?

Answer 12

Came about as a result of the inadequacy of the self-assessment system in capturing the true income of corporations. It is a means to ensure that every corporate taxpayer will make some minimum contribution to the support of the public sector

Question 13

Requisites to meet the lower RCIT

Answer 13

Taxable income not exceeding 5,000,000
total assets not exceeding 100,000,000

Question 14

Proprietary Educational Institutions and Hospitals

Answer 14

10% RCIT; MCIT is not applicable

Question 15

Type of corporation NOT allowed a lower rate of RCIT

Answer 15

Resident Foreign Corporation
Offshore Banking Units
Regional Operating Headquarters
NR Foreign Corporation