TYPES OF INCOME TAXPAYERS:

1. Individuals
2. Corporation
INDIVIDUAL INCOME TAXPAYERS:
1. CITIZEN-Resident Citizen (RC), Non-resident Citizen (NRC)
2. ALIEN- Resident Alien (RA), Non-resident alien engaged in trade or business (NRA-ETB), Non-
resident alien not engaged in trade or business (NRA-ETB)
3. TAXABLE ESTATES AND TRUSTS
CORPORATE INCOME TAXPAYERS:
1. DOMESTIC CORPORATION (DC)
2. FOREIGN CORPORATION (FC) - Resident Foreign Corporation (RFC), Non-resident Foreign
Corporation

CITIZEN:
Under the Constitution, citizens are:
a. Those who are citizens of the Philippines at the adoption of the Constitution on February 2,
1987.
b. Those whose fathers and mothers are citizens of the Philippines.
c. Those born before January 17, 1973 of Filipino mothers who elected Filipino citizenship upon
reaching the age of majority.

CLASSIFICATION OF CITIZENS:
1. Resident Citizen (RC) –a Filipino citizen residing in the Philippines.
2. Non-resident Citizen (NRC)-A citizen of the Philippines who:

 Establishes satisfaction of the Commissioner the fact of his physical presence

abroad with definite intention to reside therein.
 Who leaves Philippines during the taxable year to reside abroad, either as an
immigrant or for an employment on a permanent basis
 Who works abroad whose employment thereat requires him to be physically
presented most of the time during the taxable year
  Who has been previously considered as non-resident citizen and who arrives in
the Philippines shall be likewise treated as non-resident citizen for the taxable year
in which he arrives with respect to his income derived from abroad until the date
of his arrival in the Philippines
 Filipinos working in Philippine embassies or Philippine consulate offices
ALIEN
1. Resident Alien (RA)-residing in the Philippines but not a citizen

 An alien who lives in the Philippines for a definite purpose which in nature would
require an extended stay and makes his home temporarily in the Philippines.
 One who comes in the Philippines for a definite purpose which in nature would
require an extended stay and makes his home temporarily in the Philippines
 An alien who has acquired residence in the Philippines
2. Non-resident Alien (NRA)- not residing in the Philippines and not a citizen
a. Non-resident alien engaged in trade or business (NRA-ETB)-aliens who stayed in the
Philippines for an aggregate period of more than 180 days during the year.
b. Non-resident alien not engaged in trade or business (NRA-NETB)- alien who stayed in
the Philippines for an aggregate period not more than 180 days during the year.

THE GENERAL CLASSIFICATION RULE FOR INDIVIDUAL TAXPAYERS

1. INTENTION- the taxpayer shall submit documentary proof such as visas, work contracts and
other documents indicating such intention. Documents purporting long term stay for an
extended period would result in the automatic reclassification of the taxpayer residency.

 An alien is normally NRA. An alien who come to the Philippines with a tourist visa should
be classified as NRA
 An alien who come to the Philippines with an immigration visa should be reclassified as
RA upon his arrival.
 A citizen who would go abroad with a two-year working visa would be reclassified as NRC
upon his departure.
CORPORATE INCOME TAXPAYERS:
1. DOMESTIC CORPORATION (DC)
2. FOREIGN CORPORATION (FC) - RESIDENT FOREIGN CORPORATION (RFC), Non-resident Foreign
Corporation.
TYPES OF FOREIGN CORPORATION
1. RESIDENT FOREIGN CORPORATION- foreign corporation which operates and conducts in the
Philippines through a permanent establishment.
2. NON-RESIDENT FOREIGN CORPORATION- Foreign Corporation which does not operate and
conducts in the Philippines.

SPECIAL CORPORATIONS- are Domestic Corporation or foreign corporation which are subject to
special tax rules or preferential tax rates
OTHER CORPORATE TAXPAYERS
1. Partnership 3. Co-ownership
2. Joint Venture

PARTNERSHIPS
TYPES OF PARTNERSHIPS
A. General Professional Partnerships (GPP)- a GPP is a partnership formed for the exercise of a
common profession. All partners must belong to the same profession.
A GPP is not treated as a corporation and is not a taxable entity. It is exempt from income tax.
B. Business Partnership- one formed for profit. It is a taxable as a corporation.

JOINT VENTURE
A joint venture is a business undertaking for a particular purpose. It may be organized as a
partnership or a corporation.
TYPES OF JOINT VENTURES
A. Exempt joint ventures-formed for the purpose of construction projects or engaging
petroleum, coal, geothermal and other energy operations pursuant to an operating consortium
agreement under the service contract with the government. Exempt joint ventures are not
treated as corporation and is tax exempt.
B. Taxable joint ventures-all other joint venture are taxable as corporations.

CO-OWNERSHIP

 A co-ownership is a joint ownership of a property formed for a purpose of preserving the

same and/or dividing its income
 A co-ownership that is limited to properly preservation or income collection is not a
taxable entity and is a tax exempt.
 A co-ownership that re-invests income to other income-producing properties or ventures
will be considered an unregistered partnership taxable as corporation.

THE GENERAL RULES IN INCOME TAXATION

TAXABLE ON INCOME EARNED

INDIVIDUALS Within Without

Resident citizen (RC) / /
Non-resident citizen /
Resident alien (RA) /
Non-resident alien (NRA) /
CORPORATION Within Without
Domestic corporation (DC) / /
Resident foreign corporation (RFC) /
Non-resident foreign corporation (NRFC) /

SITUS OF INCOME- The situs of income is the place of taxation of income.

INCOME SITUS RULES

TYPES OF INCOME PLACE OF TAXATION (SITUS)
Interest income Debtor’s residence
Royalties Where the intangible is employed
Rent Income Location of the property
Service income Place where the service is rendered