REVIEW-APC008_IEAT - ASIA PACIFIC COLLEGE Makati City TAXATION Prof.REHermosilla ( , accumulat


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TAXATION Prof. RE HermosillaIMPROPERLY ACCUMULATED EARNINGS TAX(For Closely Held Corporations)Imposition of improperly accumulated earnings taxIn addition to other taxes imposed, there is imposed for each taxable year on the improperly accumulated taxable income of each corporation an improperly accumulated earnings tax equal to 10% of the improperly accumulated taxable income.Not subject to improperly accumulated earnings tax(a)Publicly-held corporations;(b)Banks and other nonbank financial intermediaries;(c)Insurance companies.(d)Taxable partnerships(e)General professional partnerships(f)Non-taxable joint ventures; and(g)Enterprises registered with PEZA and under Bases Conversion and Development Act, special economic zones.Holding Company or investment companyThe fact that any corporation is a mere holding company or investment company shall be prima facie evidence of a purpose to avoid the tax upon its shareholders or members.Earnings or profits of a corporation are permitted to accumulate beyond the reasonable needsThe fact that the earnings or profits of a corporation are permitted to accumulate beyond the reasonable needs of a business shall be determinative of the purpose to avoid the tax upon its shareholders or member, unless the corporation, by clear preponderance of evidence, shall prove to the contrary. Evidence of Purpose to Avoid Income Tax. (1) Prima Facie Evidence. - the fact that any corporation is a mere holding company or investment company shall be prima facie evidence of a purpose to avoid the tax upon its shareholders or members.       (2) Evidence Determinative of Purpose. - The fact that the earnings or profits of a corporation are permitted to accumulate beyond the reasonable needs of the business shall be determinative of the purpose to avoid the tax upon its shareholders or members unless the corporation, by the clear preponderance of evidence, shall prove to the contrary.
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  • Spring '13
  • OslerAquino
  • Cost Accounting, Taxes, Makati City, improperly accumulated earnings, IAET

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