Rates of Tax on corporations.
Section 24
SEC. 24. Rates of Tax on corporations. — Tax on domestic corporations. — A tax is hereby imposed upon the taxable net income received during each taxable year from all sources by every corporation organized in, or existing under the laws of the Philippines no matter how created or organized, but not including duly registered general co-partnership (companias colectivas), general professional partnerships, private educational institutions, and building and loan associations, in accordance with the following: Twenty-five per cent upon the amount by which the taxable net income does not exceed one hundred thousand pesos; and Thirty-five per cent upon the amount by which the taxable net income exceeds one hundred thousand pesos. Private educational institutions other than those exempt under Section 21 (e) of this Code Shall pay a tax of ten per cent of their taxable net income. Building and loan associations operating in accordance with the General Banking Act shall pay a tax of twelve per cent of their taxable net income, Tax on foreign corporations. — Nonresident corporations. — A foreign corporation not engaged in trade or business in the Philippines including a foreign life insurance company not engaged in the life insurance business in the Philippines shall pay a tax equal to thirty-five per cent of the gross income received during each taxable year from all sources within the Philippines, as interest, dividends, rents, royalties, salaries, wages, premiums, annuities, compensations, remunerations for technical services or otherwise, emoluments or other fixed or determinable annual, periodical or casual gains, profits, and income, and capital gains; Provided, however, That premiums shall not include reinsurance premiums: Provided, further, That cinematographic film owners, lessors or distributors shall pay a tax of fifteen per cent of their gross income. Resident corporations. — A corporation organized, authorized, or existing under the laws of any foreign country, engaged in trade or business within the Philippines, shall be taxable as provided in subsection (a) of this section upon the total net income received in the preceding taxable year from all sources within the Philippines: Provided, however, That international carriers shall pay a tax of two and one-half per cent on their gross Philippine billings. Rates of tax on life insurance companies. — Life insurance companies shall be taxable as provided in this subsection or under subsections (a) or (b), as the case may be, whichever will result in a higher tax. Domestic life insurance companies. — A tax is hereby imposed upon the net investment income received during each taxable year from all sources, whether from within or outside the Philippines, by every life insurance company organized in, or existing under the laws of, the Philippines, but not including a purely cooperative company or association as defined in this Code, at the rate of eight and three-fourths per cent upon that income. A domestic life insurance company shall be exempt from income tax for a period of three years from the dale of issuance of its certificate of authority. For purposes of this paragraph, the "net investment income" of a domestic life insurance company is its gross investment income derived from sources within and outside the Philippines, less its investment expenses. Foreign life insurance companies. — A foreign life insurance company engaged in the life insurance business in the Philippines shall pay the rate of tax provided in paragraph (1) of this subsection upon the net investment income received during each taxable year from all sources within the Philippines. For purposes of this paragraph, the "net investment income from all sources within the Philippines" of a foreign lift; insurance company engaged in the life insurance business in the Philippines is that portion of its gross world investment income which bears the same ratio to that income as their total Philippine reserve bears to their total world reserve, less that portion of their total world investment expenses which bears the same ratio to those expenses as their total Philippine investment income bears to their total world investment income. For purposes of paragraphs (1) and (2) of this subsection, "gross investment income" means income received during the taxable year from rents, dividends, interest, and income from any other business than the life insurance business conducted by the company, including net capital gains as defined in Section 34 of this Code; "investment expenses" means real estate expenses, depreciation (except to the extent that property is used in or connected with its underwriting business), interest paid or accrued within the taxable year on indebtedness (except on indebtedness incurred to purchase or carry obligations the interest upon which is wholly exempt from taxation under existing laws), and such investment expenses paid or accrued during the taxable year as are ordinary and necessary in the conduct of its investment or in the conduct of its business other than the life insurance business. The provisions of existing special or general laws to the contrary notwithstanding, all corporate taxpayers not specifically exempt under Sections 24(c) (1) and 27 of this Code shall pay the rates provided in this section. All corporations, agencies, or instrumentalities owned or controlled by the Government, including the Government Service Insurance System and the Social Security System but excluding educational institutions, shall pay such rate of tax upon their taxable net income as are imposed by this section upon associations or corporations engaged in a similar business or industry.