|
Page |
| Part I. — GENERAL DESCRIPTION OF INCOME-TAX SYSTEM |
106 |
| 1. Taxpayers: |
|
| (a) Individuals |
107 |
| (b) Partnerships |
107 |
| (c) Companies |
107 |
| 2. Taxable Income |
107 |
| Assessment of Tax |
108 |
| Schedule 1. — Commerce |
108 |
| Schedule 2. — Industry |
110 |
| Schedule 3. — Agriculture |
110 |
| Schedule 4. — Credits |
111 |
| Schedule 5. — Participations in Concessions |
112 |
| Schedule 6. — Wages and Salaries |
113 |
| Schedule 7. — Professions |
113 |
| 4. Collection of Tax: |
|
| (a) By Direct Payment |
113 |
| (b) By Withholding at the Source |
115 |
| 5. Procedure in Assessment and Appeals |
115 |
| Part II. — METHODS OF TAXING FOREIGN AND NATIONAL ENTERPRISES: |
|
| A. Foreign Enterprises: |
|
| 1. Definition and General Principles |
116 |
| 2. Taxation of Certain Kinds of Income: |
|
| (a) Dividends |
116 |
| (b) Interest |
116 |
| (c) Directors’ Percentages (Tantièmes) |
117 |
| (d) Royalties for Use of Patents, Copyrights, Trade-marks, Secret Processes and Formulæ, and Similar Income |
117 |
| (e) Rents from Real Estate, Mining Royalties and Similar Income |
117 |
| (f) Gain derived from the Purchase and Sale of Real Estate, Securities and Personal Property |
117 |
| (g) Salaries, Wages, Commissions and Other Remunerations for Services (including Directors’ Salaries and Fees) |
117 |
| (h) Income from a Trust |
117 |
| (i) Income from carrying on a Business or Industry |
117 |
| B. National Enterprises |
118 |
| Part III. — METHODS OF ALLOCATING TAXABLE INCOME: |
|
| A. Foreign Enterprises with Local Branches or Subsidiaries: |
|
| I. General Questions and Methods of Apportionment: |
|
| (a) Book-keeping and Accounting Requirements |
119 |
| (b) Methods of Allocation: |
|
| 1. Method of Separate Accounting |
121 |
| 2. Empirical Methods |
122 |
| 3. Method of Fractional Apportionment |
122 |
| 4. Requirements for Selection of Methods and Value $$$ot the Various Methods |
122 |
| (c) Apportionment between Branch and Parent Enterprise: |
|
| 1. Apportionment of Gross Profit of Local Branch to Real Centre of Management abroad |
122 |
| 2. Apportionment of Expenses of Real Centre of Management to Branch: |
|
| Interest Charges |
122 |
| General Overhead |
123 |
| 3. Apportionment of Net Profit of Branch to Deficitary Parent and vice versa |
123 |
| (d) Apportionment between Parent Enterprise and Subsidiaries |
123 |
| II. Application of the Methods of Allocation in Specific Cases: |
|
| (a) Industrial and Commercial Enterprises: |
|
| 1. Selling Establishments: |
|
| Local Establishments selling in National Markets |
123 |
| Local Establishments of Foreign Enterprises selling abroad |
124 |
| 2. Manufacturing Establishments |
124 |
| 3. Processing Establishments |
124 |
| 4. Buying Establishments |
124 |
| 5. Research or Statistical Establishments, Display Rooms, etc. |
124 |
| (b) Banking Enterprises |
124 |
| (c) Insurance Enterprises |
125 |
| (d) Transport Enterprises |
125 |
| (e) Power, Light and Gas Enterprises |
125 |
| (f) Telegraph and Telephone Enterprises |
125 |
| (g) Mining Enterprises |
125 |
| B. National Enterprises with Branches or Subsidiaries abroad: |
|
| I. General Methods of Allocation |
126 |
| II. Allocation of Profit to Real Centre of Management within the Country |
126 |
| C. Holding Companies: |
|
| I. National Holding Company controlling one or more Foreign Subsidiary Companies |
126 |
| II. Local Subsidiary Company controlled by a Foreign Holding Company |
126 |
| ANNEX: Table of Tariffs |
127 |
