AFISCO Insurance et al vs.

CA/CTA/CIR
GRN 112675 January 25, 1999
Panganiban, J.:
FACTS:
The 41 non-life insurance corporation entered into a Qouta Share Reinsurance Treaty with
Munich, non-resident corporation. The reinsurance treaty required petitioners to form a pool. CA
ruled that the pool of machinery was a partnership taxable as a corporation, and that the latters
collection of premiums on behalf of its members was taxable income.
ISSUE:
Whether or not the insurance pool be taxable as an incorporation and its remittances be taxable
as dividends.
RULING:
The Philippine legislative included in the concept of corporation those entities that resembled
them such as unregistered partnerships and associations. Section 24 covered unregistered
partnerships and even associations and joint accounts, which had no legal personalities apart
from their individual members.
The term partnership includes a syndicate group, pool, joint venture or other unincorporated
organization, through or by means of which any business financial operation or venture is carried
on.
The pool is taxable entity distinct from the individual corporate entities of the insurance
companies. The tax on income is different from the tax on dividends received by said companies,
thus no double taxation.