According to the tax regulations, the leasing, or subletting of properties by corporations also constitutes a business. The rents they collect are subject to profits tax, but no property tax will be levied. Even so, the Inland Revenue Department usually issues property tax bills in the following situations:
• The corporation holds the property on behalf of other individual owners as a trustee or agent
• The corporation has been deemed by Article 24 of the Inland Revenue Ordinance to have no business clubs or associations
• Possession of mortgagee
• The corporation is a foreign corporation
• The corporation and other persons jointly own the title
If the corporation’s rental income has indeed been paid for profits tax, but at the same time the Inland Revenue Department issues a property tax bill to the corporation, the property tax paid by the corporation can be used to offset the profits tax. In fact, the corporation can file a claim for exemption from property tax in the property tax return BIR58.
The above information is for reference only. If in doubt, we welcome your tax inquiries