1. Corporate Income Taxation
Philippine income taxation

2. What is taxation subject?
HEADACHE/DIZZYNESS
NO REACTION
EXCITED
BORING

3. Corporate Income Taxation
Definition of corporation is accounting and taxation viewpoint
Classifications
Different taxes paid by the corporation
Other Taxes
Filling of corporate income tax

4. Definition of Corporation
Section 2, Corporate code of the Philippines A corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.
Section 22, National Internal Revenue Code of the Philippines
INCLUSIONS
Partnership, no matter how created or organized
Joint stock companies
Joint accounts (cuentas en participation)
Association
Insurance Companies
EXCLUSIONS
General professional partnerships
Joint venture or consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal and other energy operations

5. Philippine corporate income tax as highest tax rates in Asian

6. What is partnership? Is the partnership Income earned from trading?
Yes No
Type
COMMERCIAL
PROFFESIONAL
Income Tax
NCIT – 30% or
MCIT – 2%
Exempt from Income Tax
Distributive Shares
Distributive Share
Withholding Tax
Final Withholding Tax (FWT) of 10%
Creditable withholding Tax (CWT)
P720, 000 and below = 10%
More than P720, 000 = 15% (RR. 30 – 2003)

7. What is Joint Stock? A joint-stock company is a business entity where different stocks can be bought and owned by shareholders. Each shareholder owns company stock in proportion, evidenced by his or her shares (certificates of ownership).

8. What is Joint Accounts (Cuentas en participation)
What is Joint Accounts (Cuentas en participation)? An account at a bank or a brokerage where there are two or more account holders. The holders of a joint account share all rights and responsibilities regarding the account. That is, one may deposit or withdraw money from a joint account without the consent of the other and both may be held liable for an overdraft or loss. Joint accounts are most common for married couples. What is Associations? A voluntary group or union (also sometimes called a voluntary organization, common-interest association, :or just an association) is a group of individuals who enter into an agreement as volunteers to form a body (or organization) to accomplish a purpose.

9. Classification of Corporation as to creation
Domestic Corporation (DC)
created and organized in the Philippines or under its laws
Classified as
Exempt corporations
Exempt non-profit corporation under the NIRC
Government agencies and instrumentalities
Government-owned and controlled corporation
Cooperatives
Special Domestic Corporation
Proprietary educational institutions and non-profit hospitals
Foreign currency deposit units (FCDs) and Expanded FCDU’s
PEZA or BOI-registered enterprises

10. Resident foreign corporation (RFC)
foreign corporation engaged in trade or business within the Philippines (Philippine branch of foreign corporation, regional operating headquarters of multinational companies, regional or area headquarters of multinational companies and representative offices)
Special resident foreign corporation
Offshore banking units (OBU) and Expanded FCDUs
Regional Area Headquarters and Regional Operating Headquarters of Multinational Companies
International carrier
BOI or PEZA-registered enterprises

11. Non-Resident foreign corporation (NRFC)
engaged in trade or business in the Philippines in which permit license is not necessary
Special non-resident foreign corporation
Cinematographic film owner, lessor or distributor
Lessor of vessels, chartered by Philippine nationals
Owner of lessor of aircraft, machineries and other equipment

12. Different classification of Taxes
Regular corporate Income Tax (NCIT/RCIT)
NCIT is subject to 30% of taxable income
Taxable income is computed by deducting all the expenses to the gross income
MCIT is an option to NCIT to Domestic and Resident Corporation
it is subject to 2% of gross income
RR includes all other items of taxable income not subject to final tax and capital gains tax
applicable when
The corporation has zero or negative taxable income in fourth year of operation
MCIT is greater than the NCIT

13. limitation
Real Estate Investment Trusts under RA 9856
Domestic corporation opted to be taxed under 15% GIT
Domestic or resident corporation subject to special tax rates
All non-resident foreign corporations
Benefits/Advantage
Excess of the MCIT over the NCIT in any year is a tax credit that is deductible against any NCIT tax due in the immediately succeeding three years.
Excess MCIT can be used only as a tax credit against NCIT in any of the 3 subsequent years.
The application should be first in-first out basis
Unused Excess MCIT at the end of the 3 years shall expire

14. Discharge from MCIT
Prolonged labor dispute
Force majeure
Legitimate business reverses
3. Gross Income Tax (GIT)
15% GIT for Domestic Corporation still remains in law but not in practice
A tax effort ratio of twenty percent (20%) of Gross National Product (GNP)
A ratio of forty percent (40%) of income tax collection to total tax revenues
A VAT tax effort of four percent (4% of GNP)
A 0.9% ration of the Consolidated Public Sector Financial Position to GNP
A ratio of cost of sales to gross sales or receipts from all sources does not exceed fifty-five percent (55%).