An Act Establishing The Tax Regime Of One Person Corporations, Amending For This Purpose Section 22(B) Of The National Internal Revenue Code Of 1997, As Amended

• This proposed measure seeks to establish the tax regime of One Person Corporation (OPC). The concept of OPC has been introduced in our jurisdiction for the first time through Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines
• Under OPC concept, an individual natural person, by himself, may now establish a corporation to pursue any commercial activity. Just like an ordinary corporation, OPC type of business organization has a personality separate and distinct from the single stockholder composing it. 
• However, for income tax purposes, the tax regime of OPC is not clear. The National Internal Revenue Code (NIRC) of 1997, as amended, defines “corporation” as including partnerships, no matter how created or organized, joint-stock companies, joint accounts (cuentas en participacion), associations, or insurance companies, but does not include general professional partnerships and a joint venture or consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating consortium agreement under a service contract with the Government. 
• Hence, the inclusion of OPC in the definition of “corporation” under the NIRC is necessary to remove ambiguity or avoid different interpretations whether or not OPC is a corporation for income tax purposes.

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