Taxation, 2014 Bar — Question XI

QUESTION

Triple Star, a domestic corporation, entered into a Management Service Contract with Single Star, a non-resident foreign corporation with no property in the Philippines. Under the contract, Single Star shall provide managerial services for Triple Star's Hongkong branch. All said services shall be performed in Hongkong. Is the compensation for the services of Single Star taxable as income from sources within the Philippines? Explain. (4%)

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