They refer to corporations not subject to the normal income tax rate. Classification of Special Corporations: Domestic Special Foreign Special Corporations Corporation Proprietary educational International carrier institutions Regional Operating HQ Offshore banking units Proprietary hospitals Branch remittances Owner/lessor/distributor of cinematographic film NR Owner/lessor of machinery/equipment/aircraf NR Owner/lessor of vessels chartered by Philippine nationals What are Proprietary Educational Institutions? Any private school maintained & administered by private individuals or groups with an issued permit to operate from DepEd, or CHED or TESDA. What is the Predominance Test on PHEI? If the GI from unrelated trade/business/other activity > 50% of the total GI from all sources, ENTIRE taxable income shall be subject to the REGULAR corporate tax rate Special Types of Domestic Corporation: Domestic Corporation Tax Rate Tax Base PHEI 10% GI on related trade/business/activity , subject to Predominance Test.
GOCC, Govt. Agencies/LGUs 30% GI on related
trade/business/activity GSIS/SSS/PHIC/PCSO Exempt Depositary Banks 10% Interest Income from FC transactions What is Gross Philippine Billings? Refers to gross revenue derived from carriage of persons, excess baggage, cargo, and mail originating from the Philippines in a continuous and uninterrupted flight, irrespective of the place of sale or issue and the place of payment of the ticket or passage document. Special Types of Foreign Corporation: Foreign Corporation Tax Rate Tax Base International Air Carrier/Shipping 2.5% Gross Philippine Billings Owner /lessors of vessel charted 4.5% Gross Income by Philippine nationals Owner/lessors of aircraf, 7.5% Gross Income machineries and other equipment OBUs 10% Interest Income on FC transactions granted to Residents only. Regional Operating HQ 10% Taxable Income Cinematographic film owner, lessor 25% Gross Income or distributor Distinction between ROH and RAH: Regional Operating HQ Regional Area HQ Are branches established by multi-national Are branches established by co. which are engaged in any of the ff.: multi-national co. and which do general administration and planning; business planning and coordination; not earn income from the sourcing and procurement of RM and Philippines and which act as components; corporate finance advisory supervisory, communications, services; marketing control and sales and coordinating center for their promotion; training and personnel mgt.; affiliates, subsidiaries or logistic services; R/D services and product devt.; technical support and maintenance; branches. data processing and communications; and, business devt.
Subject to 15% tax Tax-exempt
What is Branch Profit Remittance Tax? BPRT of 15% shall be imposed on any profit remitted by a branch to its head office. The Branch will first be subjected to ordinary corporate tax as a resident foreign corporation (30%). Aferwards, the profits for remittance shall then be subject to 15% BPRT. What is Optional Gross Income Taxation? Effective Jan. 1, 2000: the President (upon recommendation of the Sec of Finance) may allow corporation an option to be taxed at 15% of gross income afer the ff. conditions are satisfied: Tax effort ratio 20% of GNP Ratio of IT collection to total tax revenue 40% VAT tax effort 4% of GNP Ratio of Consolidated Public Sector Financial 0.9% Position (CPSFP) to GNP Ratio of Cost of Sales to Gross Sales from all sources Not exceeding 55%
The election of the option shall be irrevocable for 3
consecutive taxable years during which the corp. is qualified under the scheme. - End -