TITLE II TAX ON INCOMECHAPTER I DEFINITIONSSEC. 22 Definitions - When used in this Title: (A) The term "person" means an individual, a trust, estate or corporation(B) The term "corporation" shall include partnerships, no matter how created or organized, joint-stock companies, joint accounts (cuentas en participacion), association, or insurance companies,ut does not include general pro!essional partnerships and a joint venture or consortium !ormed!or the purpose o! undertaking construction projects or engaging in petroleum, coal, geothermalandother energ"operationspursuant toanoperatingconsortiumagreement underaservicecontract with the #overnment"General professional partnerships" are partnerships !ormed "persons !or the sole purpose o! e$ercising their common pro!ession, no part o! the income o!which is derived !rom engaging in an" trade or usiness(%)Theterm"domestic", whenappliedtoacorporation, meanscreatedororganizedinthe&hilippines or under its laws(') Theterm"foreign",whenappliedtoacorporation, means acorporationwhichis notdomestic(() The term "nonresident citizen" means:()) A citizen o! the &hilippines who estalishes to the satis!action o! the %ommissioner the !acto! his ph"sical presence aroad with a de!inite intention to reside therein*(+) A citizeno!the&hilippineswholeavesthe&hilippinesduringtheta$ale"eartoresidearoad, either as an immigrant or !or emplo"ment on a permanent asis*(,) Acitizen o! the &hilippines whoworks and derives income !romaroad and whoseemplo"ment thereat re-uires him to e ph"sicall" present aroad most o! the time during theta$ale "ear*(.) A citizen who has een previousl" considered as nonresident citizen and who arrives in the&hilippines at an" time during the ta$ale "ear to reside permanentl" in the &hilippines shalllikewiseetreatedasanonresident citizen!or theta$ale"ear inwhichhearrivesinthe&hilippines with respect to his income derived !rom sources aroad until the date o! his arrival inthe &hilippines*(/) The ta$pa"er shall sumit proo! to the %ommissioner to show his intention o! leaving the&hilippines to reside permanentl" aroad or to return to and reside in the &hilippines as the casema" e !or purpose o! this 0ection*(1) The term "resident alien" means an individual whose residence is within the &hilippines andwho is not a citizen thereo!*(#) The term"nonresident alien"means anindividual whose residence is not withinthe&hilippines and who is not a citizen thereo!*(2) The term "resident foreign corporation" applies to a !oreign corporation engaged in trade orusiness within the &hilippines*(3) The term 'nonresident foreign coror!tion' applies to a !oreign corporation not engaged intrade or usiness within the &hilippines*(4) The term "fiduciary" means a guardian, trustee, e$ecutor, administrator, receiver, conservatoror an" person acting in an" !iduciar" capacit" !or an" person*(5) The term"withholding agent"means an" person re-uired to deduct and withhold an" ta$under the provisions o! 0ection /6*(7) The term "shares of stock"shall include shares o! stock o! a corporation, warrants and8oroptionstopurchase shares o! stock,as wellasunits o! participationina partnership (e$ceptgeneral pro!essional partnerships), joint stock companies, joint accounts, joint ventures ta$aleas corporations, associations and recreation or amusement clus (such as gol!, polo or similarclus), and mutual !und certi!icates*(9) The term "shareholder" shall include holders o! a share8s o! stock, warrant8s and8or option8sto purchase shares o! stock o! a corporation, as well as a holder o! a unit o! participation in apartnership (e$cept general pro!essional partnerships) in a joint stock compan", a joint account, ata$ale joint venture, a memer o! an association, recreation or amusement clu (such as gol!,polo or similar clus) and a holder o! a mutual !und certi!icate, a memer in an association, joint-stock compan", or insurance compan"*(:) The term "taxpayer" means an" person suject to ta$ imposed " this Title*(;) The terms "including" and "includes"" when used in a de!inition contained in this Title, shallnot e deemed to e$clude other things otherwise within the meaning o! the term de!ined*(&)Theterm"taxableyear"meansthecalendar"ear, orthe!iscal "earendingduringsuchcalendar "ear, upon the asis o! which the net income is computed under this Title*epulic Act :o* ,,6, as amended, otherwise known as the #eneral BankingAct, authorized " the Bangko 0entral ng &ilipinas (B0&) to per!orm -uasi-anking activities*(B) Theterm"quasi-bankingactivities"means orrowing!unds !romtwent"(+C) or morepersonal or corporate lenders at an" one time, through the issuance, endorsement, or acceptanceo! det instruments o! an" kind other than deposits !or the orroweretirement ene!its received under >epulic Act :o* 6J.) and those received " o!!icialsand emplo"ees o! private !irms, whether individual or corporate, in accordance with areasonale private ene!it plan maintained " the emplo"er: &rovided, That the retiringo!!icial or emplo"ee has een in the service o! the same emplo"er !or at least ten ()C)"ears and is not less than !i!t" (/C) "ears o! age at the time o! his retirement: Provided,further, That theene!itsgrantedunder thissuparagraphshall eavailedo! "ano!!icial or emplo"ee onl" once*1or purposes o! this 0usection, thetermepulic Act :o* I+I+*(!) Bene!itsreceived!romthe#030under>epulicAct :o* I+F), includingretirementgratuit" received " government o!!icials and emplo"ees*(6) 0iscellaneous !tems+ ,(a) !ncome (erived by 1oreign Government- 3ncome derived !rom investments inthe &hilippines inloans, stocks, onds or other domestic securities, or !rominterest on deposits in anks in the &hilippines " (i) !oreign governments,(ii) !inancing institutions owned, controlled, or enjo"ing re!inancing !rom !oreigngovernments, and(iii) international or regional !inancial institutions estalished " !oreigngovernments*() !ncome (erived by the Government or its Political )ubdivisions* - 3ncome derived!roman"pulic utilit"or !romthe e$ercise o! an"essential governmental!unction accruing to the #overnment o! the &hilippines or to an" politicalsudivision thereo!*(c) Prizes and $wards - &rizes and awards made primaril" in recognition o! religious,charitale, scienti!ic, educational, artistic, literar", or civic achievement ut onl"i!: (i) Therecipient wasselectedwithout an"actiononhispart toenter thecontest or proceeding@ and (ii) Therecipient isnot re-uiredtorender sustantial !utureservicesasacondition to receiving the prize or award*(d) Prizesand$wardsin)ports#ompetition+-All prizesandawardsgrantedtoathletes in local and international sports competitions and tournaments whetherheld in the &hilippines or aroad and sanctioned " their national sportsassociations*(e) ;egister o!'eeds shall e suject to the penalties imposed under 0ection +JF o! this %ode*SEC. (,. Tax on Profits !ollectible from (*ner or (ther Persons+ - The ta$ imposed under thisTitle upon gains, pro!its, and income not !alling under the !oregoing and not returned and paid "virtue o! the!oregoing or as otherwiseprovided " lawshall e assessed"personal returnunder rules and regulations to e prescried " the 0ecretar" o! 1inance, upon recommendationo! the %ommissioner*The intent and purpose o! the Title is that all gains, pro!its and income o! a ta$ale class, asde!ined in this Title, shall e charged and assessed with the corresponding ta$ prescried " thisTitle, and said ta$ shall e paid " the owners o! such gains, pro!its and income, or the properperson having the receipt, custod", control or disposal o! the same*1or purposes o! this Title, ownership o! such gains, pro!its and income or liailit" to pa" the ta$shall e determined as o! the "ear !or which a return is re-uired to e rendered*CHAPTER XESTATES AND TR&STSSEC. )-. Imposition of Tax. 01A2ApplicationofTax* -Theta$imposed"thisTitleuponindividualsshall appl"totheincome o! estates or o! an" kind o! propert" held in trust, including:*()) 3ncome accumulated in trust !or the ene!it o! unorn or unascertained person or personswith contingent interests, and income accumulated or held !or !uture distriution under the termso! the will or trust@(+) 3ncome which is to e distriuted currentl" " the !iduciar" to the ene!iciaries, and incomecollected " a guardian o! an in!ant which is to e held or distriuted as the court ma" direct@ (,)3ncome received " estates o! deceased persons during the period o! administration or settlemento! the estate@ and (.) 3ncome which, in the discretion o! the !iduciar", ma" e either distriuted tothe ene!iciaries or accumulated*1.2 %xception+ - The ta$ imposed " this Title shall not appl" to emplo"ee