Under Article 145 of the Revised Corporation Code (RCC), the appointment of a resident agent is a condition to the issuance of a license for a
foreign corporation to transact business in the Philippines.
"Online activity is sufficient to constitute doing business in the Philippines, thus, a
foreign corporation engaged in POGO is considered resident
foreign corporation engaged in business in the Philippines and not a non-resident
foreign corporation," he said.
Citing the previously issued RMC 102-2017 also concerning taxes slapped on Pogo, Dulay said that 'online activity is sufficient to constitute doing business in the Philippines; thus, a
foreign corporation engaged in Pogo is considered as resident
foreign corporation engaged in business in the Philippines and not a nonresident
foreign corporation.'
Due to the Tax Cuts and Jobs Act, (4) this approach must now be assiduously refined, due to the repeal of the 30-day rule as previously set forth in the controlled
foreign corporation provisions.
corporations, a
foreign corporation's earnings may be subject to multiple layers of foreign tax.
shareholder who owned at least 10% of a
foreign corporation considered a controlled
foreign corporation (CFC) for at least 30 days during the tax year and who owned the stock on the last day of the year.
Subject to certain exceptions, a qualified
foreign corporation is any
foreign corporation that is either (i) incorporated in a possession of the United States, or (ii) eligible for benefits of a comprehensive income tax treaty with the United States that the Secretary of the Treasury determines is satisfactory, and that includes an exchange of information program (the "treaty test").
In most cases, the activities of agents, including entities such as partnerships, trusts and estates, will be imputed to the
foreign corporation. Also, activities by persons subject to a high degree of control by the corporation, including employees, will be imputed to the
foreign corporation.
Active versus inactive Controlled Foreign Corporations--In general, a
foreign corporation was considered active if earnings and profits, income taxes, receipts, expenses, distributions of E&P, or certain transactions between the
foreign corporation and its subsidiaries or majority shareholder were reported on Form 5471, Information Return of U.S.
To address the surtax result, this Part proposes two changes aimed at increasing the usefulness of the current rule that permits a
foreign corporation to avoid deemed remittances of U.S.
In the 1960s Congress decided to tax some of this income when it was earned (rather than when it was brought back into the United States), by taxing certain controlled
foreign corporations (CFCs).
In addition, Internal Revenue Code Section 1291 (b)(3)(F) coordinates with the controlled
foreign corporation provisions so the additional charge will not apply if amounts are included in income under the Controlled
Foreign Corporation rules.
