Ordinary partnerships are regulated in Articles 620 – 645 of the Code of Obligations. In Article 620 of the said Law, the ordinary partnership agreement is defined as the agreement in which two or more persons undertake to combine their labor and property to achieve a common purpose. Ordinary partnerships do not have legal entity and are not taxpayers.
If two or more corporate taxpayers operate by establishing ordinary partnerships, the profits from the partnership shall be included in the corporate earnings of the companies in proportion to their shares and they shall be taxed.
If the limited taxpayer organizations enter into ordinary partnerships engaged in construction contract works, the said ordinary partnership shall be deemed to be the workplace of the limited taxpayer organizations and taxation shall be made in accordance with the provisions of commercial earnings.
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