REVENUE MEMORANDUM CIRCULAR NO. 3-2012 issued on January 12, 2012 clarifies the tax implications of General Professional Partnership (GPP).                                                                              Income payments made to GPP in consideration for its professional services are not subject to Income Tax. It is the individual partners who shall be subject to Income Tax, and consequently, to withholding tax, in their separate and individual capacities pursuant to Section 26 of the 1997 Tax Code, as amended. Furthermore, each partner shall report as gross income his distributive share, actually or constructively received, in the net income of the partnership.                                      However, income payments made periodically or at the end of the taxable year by a GPP to the partners, such as drawings, advances, sharings, allowances, stipends and the like, are subject to the 15% creditable withholding tax, if the payments to the partner for the current year exceeds P 720,000.00; and 10% creditable withholding tax, if otherwise.