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Company
Profile
Fraser Place Forbes Tower
Fraser
Place Serviced Residences Forbes Tower, Manila recently
opened its doors to expatriate business executives with
its upscale facilities and high end services.
Located in the heart of Makati's dynamic financial district
and with easy walking distance of Ayala Avenue, Paseo de
Roxas and Makati Avenue, Fraser Place provides 150 luxurious
serviced residences for long-term expatriates, business
travelers, families and even children.
Despite the global economic downturn which has affected
the Philippines along with the other Asian economies, Fraser
Place has risen to the challenge of the market by offering
superb value for its five-star facilities.
Each unit boasts of full-height glass picture windows that
provide views of the Makati skyline, fully furnished with
modern home furniture and fixtures in separate living, dining,
kitchen, bedroom and en-suite bathrooms. In keeping with
the demands of its international clientele, Fraser Place
Manila also provides e-mail access, dual telephone lines
with voice mail, in-room personal safe and video-intercom
system for added security.
Also provided for the indulgence of guests is a fully equipped
gymnasium with sauna, an outdoor swimming pool and jacuzzi,
children's pool, barbecue area, children's playroom, nursery
and day care center as well as social programs for spouses
and children.
Aside from the convenience of being in the midst of Makati's
world-class dining, entertainment and business centers -
and at an affordable price - Fraser Place Manila provides
a real home to relax and recharge amidst a cozy ambience
that is unique to the Philippines.
For further information
www.fraserhospitality.com
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Chapter
6 -
Tax Issues
The
Philippine Taxation System | Applicable
Taxes
Retail Trade
|
Individual Taxation
| Computation
of Income Tax
The
Philippine tax system is a combination of
the global and schedular systems of taxation.
Domestic and resident taxpayers are taxed
on a worldwide income. Non-resident taxpayers
are taxed on Philippine-source income. While
a corporation is levied at a flat rate, individuals
are taxed at progressive rates.
The local government units (LGUS) are empowered
to impose local taxes and grant tax exemptions
and incentives for business activities within
their areas of jurisdiction.
Principal Taxes
The principal taxes levied include: taxes
on income and gains; taxes on transactions;
and taxes on property.
Taxes on income and gains include income tax
and capital gains tax on sale of shares of
stocks and real property.
Taxes on transactions include value-added
tax (VAT), excise tax, percentage tax on business
not subject to VAT, tariff and customs duties,
and estate and donor's taxes.
Taxes on property include real property tax
and community tax.
Classes of Taxpayers
Income taxpayers are classified as: corporations,
individuals and fiduciaries.
Corporations
include domestic corporations, resident foreign-corporations,
and non-resident foreign corporations deriving
income from sources within the Philippines.
Individuals include
citizens of the Philippines (resident and
non-resident) and aliens (resident, non-resident
engaged in trade or business in the Philippines,
and non-resident not engaged in trade or business
but deriving income from sources within the
Philippines)
Fiduciaries include
estates and trusts.
Tax Administrations
Domestic Corporations
Domestic corporations are taxed on a worldwide
income, while resident foreign corporations
are generally taxed in the same manner as
domestic corporations at the rate of 35% of
net income. Foreign corporations not engaged
in business or trade in the Philippines but
who derived their income sources in the Philippines
are taxed a flat rate of thirty five percent
(35%) also. Further interest income on foreign
loans earned is subject to a twenty percent
(20%) tax.
Foreign international carriers are taxed at
the rate of two-and-a-half percent (2.5%)
on their gross Philippine billings. Non-resident
foreign cinematographic film owners, lessors
or distributors are taxed at the rate of twenty
percent (20%) tax. Foreign mutual life insurance
companies are taxed at the rate of ten percent
(10%) of their gross investment income derived
from sources within the Philippines.
Foreign Corporations
Foreign Corporations include branch offices
or local subsidiaries of foreign companies.
Effective January 1, 1999, the effective tax
rate was set at 33% and 32 % effective 2000.
The extent to which a non-resident corporation
is liable to Philippine tax may depend on
whether or not the country of which the foreign
corporation has a tax treaty with the Philippines.
Individual resident foreigners who derive
their income from all sources in the Philippines
and in foreign countries taxed from 1-35%
on gross compensation income (arising from
an employer-employee relationship); and net
on non-compensation (business and other) income
are taxed accordingly: twenty percent (20%)
on royalties, prizes, winnings, twenty percent
(20%) on interest on bank deposit and on substitute
arrangements, five percent (5%) capital gains
tax on sale of realty.
Branch Offices
A foreign corporation with a branch in the
Philippines is taxed on its net income from
Philippine sources. It is also subject to
capital gains tax on the sale of shares of
stocks. Other income such as interest, royalties
and dividends are taxed at various rates.
A branch remittance tax of 15% is imposed
on profit actually remitted by the branch
to its head office abroad. Interests, dividends,
rents, royalties, capital gains, technical
service fees, premiums annuities, emoluments,
and other fixed or determinable income are
not considered s branch profits unless such
income items are effectively connected with
the conduct of the firm's business in the
Philippines.
Subsidiaries
A Philippine subsidiary is subject to income
tax on worldwide income.
Partnerships
Taxable income of a partnership (except general
professional partnership) is computed in the
same manner as in a corporation. Partners'
shares in taxable partnerships profits are
treated like dividends.
Joint Ventures
A joint venture formed for the purpose of
undertaking construction projects or engaging
in energy operations under a service contract
with the government is not subject to income
tax. However, the parties to the joint venture
in their individual capacity as natural or
juridical persons are subject to income tax.
Other joint venture companies are taxed similarly
to ordinary domestic corporations.
Click here to download
the PDF Version of this Chapter.
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