PART 4 C AM: Od COONS CORPORATION DEFINED For income tax purposes, a corporation as defined under Section 22 of RA 8424 shay, INCLUDE 1) Partnerships, no matter how created or organized 2) Joint stock companies Joint accounts (cuentas en participacion) But does NOT INCLUDE: 1) General professional partnerships; a : 2) A joint venture or consortium formed for the purpose of undertaking: ‘a. Construction projects; or b. Engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating or consortium agreement under a service contract with the government. JOINT VENTURE OR CONSORTIUM Joint venture is a commercial undertaking by two or more persons, differing from a partnership in that it relates to the disposition of a single lot of goods or the completion of a single project. IN GENERAL, a joint venture or consortium is taxable as corporation unless it refers to joint ventures described above. Additional requirements are as follows: 1. A joint venture or consortium formed for the purpose of undertaking construction projects is not considered as corporation (RR 10-2012, effective June 2012) provided: a) The joint venture was formed for the purpose of undertaking a construction project; and b) Should involve joining/pooling of resources by licensed local contracts; that is, licensed as general contractor by the Philippine Contractors Accreditation Board (PCAB) of the Department of Trade and Industry (DTI) ©) The local contractors are engaged in construction business; and 154Corporations 4) The Joint Venture itself must likewise be duly licensed as such by the Philippine Contractors Accreditat tion Board (PCAB) of the Department of Trade and Industry (DTI). re Cas) ote FOF.EIGN CONTRACTORS Joint ventures involving foreign contractor rs may also be treated as a on-taxable corporation provided: ’ ip The member foreign contractor is covered ‘ conbracor by the TAS. covered by a special license a The construction project is certified by the approptiate Tendering ‘Agency (government office) that the project is a foreign financed/ internationally-funded project and that international bidding is allowed under the Bilateral Agreement entered into by and between the Philippine Government and the foreign / international financing institution pursuant to the implementing rules and regulations of Republic Act No. 4566 otherwise known as Contractor's License Law. 2. A joint venture or consortium for engaging in petroleum, coal, geothermal and other energy operations pursuant to an. operating Consortium agreement under a service contract with the government. ge gi TESORO JOINT VENTURE CO-VENTURER CORPORATION INDIVIDUAL Taxable Joint Venture Exempt 410% final withholding tax. Non-taxable Joint Venture 30% RCIT Basio Tax ‘JOINT STOCK COMPANIES Joint stock companies are constituted when a group of individuals, acting jointly, establish and operate business enterprise under an artificial name, with an invested capital divided into transferable shares, an elected board of directors, and other corporate characteristics, but operating without formal government authority. % JOINT ACCOUNT COMPANIES Joint account (cuentas en participacion) is constituted when one interests himself in the business of another by contributing capital thereto, and sharing in the profits or losses in the proportion agreed upon. They are not subject to any formality and may be privately contracted orally or in writing. The term “associations” includes all organizations which have substantially the salient features of a corporation to be taxable as a “corporation.” 155Corporations CLASSIFICATION OF CORPORATE TAXPAYERS 1) Domestic Corporation (OC) ag Poarsorporation created or organized Foreign Corporation (RF Is a corporation created or organis foreign country and engaged in busines nonresident Foreign Corporation (NRFC) 3) Noorprporation created or organized ina foreiQh country or under the laws of a Feaign country but not engaged in business in the Philippines. 0c, RFC AND NRFC MAY BE CLASSIFIED FU! corporation ~ corporations subject to the regular in the Philippines or under its laws. C ized in a foreign country sin the Philippines. or under the laws of a IRTHER INTO: 1) Ordinary Ci corporate income tax (RCIT) rate of 30%. = corporations subject to income tax rate which is lower than 2). Special corporation the regular corporate income tax (RCIT) rate of 30%. ‘The Special Corporations unde ‘a. Domestic corporations = Proprietary educational institutions ‘ = Non-profit hospitals b. Resident foreign corporations = Intemational carriers Offshore banking units (OBUs) Regional Operating Headquarters (ROHQs) ler the Tax Code, as amended, are as follows: c. Nonresident foreign corporations + Non-resident Cinematographic Film Owner, Lessor or Distributor Non-resident Owner or Lessor of Vessels Chartered by Philippine Nationals + Non-resident Owner or Lessor of Aircraft, Machineries and tones Other EXEMPT ORGANIZATIONS © The following organizations shall not be subj ject to income tax [(Section 30, RA 8424); National Internal Revenue Code]: A Labor, ic - mal oetgs t oe organization not organized principally for profit; Maslov: font ret hwnd al sock reeset by rsa . on ; organized and operated for mutual purposes ets el et een order or association, operating for the exclusive benefit of the ene eaenel rf al organization operating under the lodge system, or a oe association stock corporation organized by employees provid Payment of [ife, sickness, accident, or other benefits ey te 156