book 2

(10) services rendered by regional or area headquarters established in the Phili

ppines by multinational corporations which act as supervisory, communications an
d coordinating centers for their affiliate, subsidiaries or branches in the Asia
-Pacific Region and do not earn or derive income from the Philippines
ROHQ subject to 12% VAT
RHQ exempt? no ph income?
book 1
income tax rate of rohq is 10% of net income. rohq is a branch established in th
e Philippines which is engaged in any of the following qualifying servicves:
general administration and planning
business planning, coordination and business development
sourcing/procurement of raw materials and components
corporate finance advisory services
marketing control and sales promotion
training and personnel management
logistic services
research and development services and project development
technical support and maintenance
data processing and communication
rhq is a tax exempt entity. it is a branch established in the Philippines and wh
ich headquarters do not earn or derive income from the Philippines and which act
as supervisory, communications, and coordinating center for its affiliates, sub
sidiaries, or branches in the Asia-Pacific region and other foreign markets.
special aliens (employees)
of regional or are headquarters and regional operating headquarters of multinati
onal companies
RMC 41-09 as amended by RR11-2010
15% FWT on GI derived from occupying managerial or technical positions in RHQ or
ROHQ and representativ offices established in the PH by multinational companies
.
same tax treatment apply to filipinos employed by rhq or rohq of multinational c
ompanies regardless of whether or not such filipino shall have the option to be
taxed at either 15% of gross income or the regular rate on their taxable income
in accordance with the tax code.
the term "multinational company" as defined in section 25c of the NIRC means a f
oreign firm or entity engaged in international trade with affiliates or subsidia
ries or branch offices in the Asia-Pacific region and other foreign markets.
filipinos, exercising the option to be taxed at 15% preferential tax rate for oc
cupying the same managerial or technical position as that of an alien employed i
n rhq or rohq must meet ALL of the following req.
position and function test - must occupy managerial or technical position and mu
st be EXERCISING such functions pertaining to said position. under rr 11-2010, t
he option to be subject to 15% preferential tax rate and the coverage of fringe
benefit tax are independent to each other. thus there would be instances where a
filipino employee shall enjoy 15% preferential tax rate but may not be covered
by fringe benefit tax for not being a supervisory/managerial employee
compensation threshold test - received/due to receive a contract of employment,

a gross taxable compensation income of at least 975k

provided that a change in the compensation ioncome as a consequence of which, th
e employee subsequently receiving less than the compensation threshold for the c
alendar year when the change becomes effective, result in the employee being sub
ject to the regular income tax rate. for purposes of computing the compensation
threshold, gross income include:
salaries, wages, remuneration, honoraria, annuities and other emoluments such as
allowances except income subject to fringe benefit tax
gross compensation shall not include retirement/separation benefits (taxable or
not) and de minimis benefits
exclusivity test - exclusively working for rhq/rohq as a REGULAR employee (not c
onsultant/contractual) (one employer at a time - "exclusivity")

rr 11-2010
multinatonal company - a foreign firm or entity engaged in international trade w
ith its affiliates or subsidiaries or branch offices in the asia pacific region
and other foreign makrets.
managerial employee - one who is vested with powers or prerogatives to lay down
and execute managerial policies
supervisory employee - one who, in the interest of the employer, effectively rec
ommend such managerial actions if the exercise of such authority is not merely r
outinary or clerical in nature but requires the use of independent judgement