MANAGEMENT

Detailed explanation-1: -A publicly-listed corporation or a corporation owned directly or indirectly by a publicly-listed corporation is not automatically exempt from IAET. As mentioned, the individual ownership of a corporation shall be considered in determining whether a corporation is publicly-held for IAET purposes.

Detailed explanation-2: -This improperly accumulated earnings tax (IAET) is imposed as a penalty on corporations which allow accumulation of earnings for the purpose of avoiding tax liability for their shareholders if they decide to distribute profits in the form of dividends.

Detailed explanation-3: -Joint ventures, regardless of the purpose by which they were created, are generally exempt from corporate income tax. 14. The share of a co-venturer corporation in the net income of a taxable joint venture or consortium is subject to corporate income tax.

Detailed explanation-4: -If a company does not distribute any dividends by keeping a portion of retained earnings as accumulated earnings, shareholders are able to avoid this tax. Companies that retain earnings typically experience higher stock price appreciation.