This research is done at UD Sejati Abadi Medan. The company is engaged in general electric distributor. The objective of this study is to know either partnership or corporation business type will be more appropriate to be implemented at UD Sejati Medan in minimizing the income tax payment. The methods used by the writer in this research is qualitative descriptive method. The research will analyzes the income tax payment after decision of changing business type and compares the income tax payment with changing to partnership and income tax payment with changing to corporation in making decision of changing business type to minimizing the income tax payment Based on research result, conclusion of this research is that changing business type from sole proprietorship to corporation at UD Sejati Abadi Medan can minimize the income tax payment. In year 2016, UD Sejati Abadi Medan must pay the income tax in Rp 208,586,000.00. In partnership, the salaries and allowance to owner cannot be recognized as deductible expense. The dividend, salaries and allowance for owner are not as taxable income for owner. In the corporation, the salaries and allowance to shareholder can be recognized as deductible expenses. The salaries and allowance for shareholder should be imposed with Article 21 Income Tax. The company can get income tax saving in Rp 39,737,091.00 if the company chooses to changing business types become corporation.