Chapter 3 Persons Subject to Income Tax

Sec. 22(A) of the NIRC, Person means:

A.
B.
C.
D.

Individual
Corporation
Estates and Trusts
Other entities including partnership. [Sec. 22 (B)]

A. INDIVIDUALS
1. Resident citizen (RC) a citizen of the PH residing therein is taxable on all income
derived from sources with and without the PH.
2. Non-resident citizen (NRC) taxable only on income derived from sources within
the PH.
3. Overseas contract worker (OCW) commonly referred to as OFWs individual
citizen of the PH who is working and deriving oncome from abroad as an overseas
contract worker is taxable only on income derived from sources within the PH.
Provided, that a seaman who is a Filipino citizen and who receives compensation
for services rendered abroad as a member of the complement of a vessel engaged
exclusively in international trade shall be treated as an overseas contract worker.
4. Resident alien (RA) taxable only on income derived from sources within the PH.
5. Non-resident alien engaged in trade or business (NRAETB) - taxable only on
income derived from sources within the PH.
6. Non-resident alien NOT engaged in trade or business (NRANETB) - taxable
only on income derived from sources within the PH.
B. CORPORATIONS
1. Domestic Corporation (DC) taxable on all income derived from sources within
and without the PH.
2. Resident foreign corporation (RFC) taxable only on income derived from
sources within the PH.
3. Non-resident foreign corporation (NRFC) taxable on income derived from
sources within the PH.

Taxpayer
1. RC
2. RA, NRC, NRAETB,
NRANETB
3. DC
4. RFC & NRFC

Items on gross
income
Within
Without

C. ESTATES AND TRUSTS

In Sec 60, tax shall apply to income of estates or of any kind of property held in trust,
including:
1. Income accumulated in trust for the benefit of unborn or unascertained person or
persons with contingent interests, and income accumulated or held for future
distribution under the terms of the will or trust;
2. Income which is to be distributed currently by the fiduciary to the beneficiaries, and
income collected by a guardian of an infant which is to be held or distributed as the
court may direct;
3. Income received by the estates of deceased persons during the period of
administration or settlement of the estate; and
4. Income which, in the discretion of the fiduciary, may be either distributed to the
beneficiaries or accumulated.
D. OTHER ENTITIES INCLUDING PARTNERSHIPS
In Sec. 22 (B), the term corporation shall include:
1. Partnerships, no matter how created or organized, but does not include:
a. General professional partnerships
b. Joint venture or consortium formed for the purpose of undertaking construction
projects

c. Joint venture or consortium formed for the purpose of engaging in petroleum,

coal, geothermal and other energy operations pursuant to an operating
consortium agreement under a service contract with the Government.
2. Joint-stock companies
4. Association
3. Joint accounts
5. Insurance companies