RMC. No. 3-2012 dated January 12, 2012 General Professional Partnerships

Income payments made to general professional partnerships (GPPs) for its professional services are not subject to income tax and, consequently, to EWT. It is the individual partners who shall be subject to such taxes in their separate and individual capacities.

>

Each partner shall report as gross income his distributive share, actually or constructively received, in the net income of the partnership.

Income payments made periodically or at the end of the taxable year by a GPP to the partners, such as drawings, advances, allowances and the like, are subjectto 15% creditable withholding tax (CWT) if the payments to the partner for the current year exceed P720.000 while payments that do not exceed P720,000 are subjectto 10% CWT.

RMC. No. 3-2012 dated January 12, 2012General Professional Partnerships