·
The
term “Corporation” shall
include partnerships, no matter how created or organized, joint stock
companies, joint accounts (ceuntas en participacion), associations, or
insurance companies. It also includes mutual fund companies, regional operating
headquarters of multinational corporations, and joint accounts.
The term “Corporation” does not include the following:
1. A
general professional partnership – a partnership formed by persons for the sole
purpose of exercising their common profession.
2. A
joint venture or consortium formed for the purpose of undertaking construction
projects.
3. A
joint 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.
|
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.
|
|
|
|
|
|
|
|
|
|
|
Under Section 3 of RR 20-2012, Effective June 2012, a joint venture or consortium formed
for the purpose of undertaking construction projects not considered as corporation under Sec 22 of the NIRC of 1997 as
amended, should be:
- For the
undertaking of a construction project; and
- Should involve
joining or 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);
- These
local contractors are engaged in construction business; and
- The Joint Venture itself must likewise be duly licensed as such by the
Philippine Contractors Accreditation Board (PCAB) of the Department of Trade
and Industry (DTI)
Mandatory Enrollment to the BIR’s
EFPS
All licensed
local contractors are required to enroll themselves to the Bureau of Internal
Revenue’s Electronic Filing and Payment System (EFPS). The enrollment should
be done at the Revenue District Office (RDO) where the local contractors are
registered as taxpayers.
Joint ventures
involving foreign contractors
may also be treated as a non-taxable corporation provided:
- The
member foreign contractor is covered by a special license as contractor by the Philippine Contractors
Accreditation Board (PCAB) of the Department of Trade and Industry (DTI); and
- The construction project is certified by the
appropriate 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.
Absent any one
the aforesaid requirements, the joint venture or consortium formed for the
purpose of undertaking construction projects shall be considered as taxable
corporations. In addition, the tax-exempt joint venture or consortium as
herein defined shall not include those who are mere suppliers of goods,
services or capital to a construction project. The member to a Joint Venture
not taxable as corporation shall each be responsible in reporting and paying
appropriate income taxes on their respective share to the joint ventures
profit.
|
|
|
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 accounts (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.
|
