This document summarizes corporate income taxation in the Philippines. It defines domestic corporations, resident foreign corporations, and non-resident foreign corporations. It outlines the types of taxable income and various corporate income taxes. It provides the formulas for calculating normal income tax, minimum corporate income tax, and optional gross income tax. It also summarizes the different tax applications and rates for each type of corporate taxpayer.

1. Income Taxation of Corporate Taxpayers (Courtesy: www.philtaxation.blogspot.com )

14. Summary of corporate applications Income DC RFC NRFC Taxable income W/in & W/out Within Within Cost of sales Yes Yes No Allowable deductions/OSD Yes Yes No MCIT Yes Yes No Foreign tax credits Yes Yes, if w/in n/a Optional GIT 15% 15% n/a IAET 10% 10% n/a

15. Summary of corporate applications Income DC RFC NRFC CGT-share 5/10% 5/10% 5/10% CGT-RP 6% 6% 30% Stock transaction tax ½ of 1% ½ of 1% ½ of 1% Profit remittance tax n/a 15% n/a Inter corporate dividends Exempt Exempt 15% reciprocity law or 30% Interest on foreign loans 32/35/30% 32/35/30% 20%

17. Special Domestic Corporations (Courtesy: www.pinoytaxation.com ) Nature Tax Rate Others Proprietary educational institutions Private schools 10% of TNI, except if unrelated income exceeds 50% Capital expenditure expensed at option Non-profit hospitals hospitals 10% of TNI GOCC’s Public/ privatized NCIT SSS, GSIS, PHIC, PCSO Government institutions Tax exempt

18. Special Resident Foreign Corps. Nature Tax Rate Others International carrier Shipping/airline 2 ½% of gross Phil. billing Offshore banking units Branch of foreign banks 10% of gross income Regional area headquarters (RAHQ) Phil. Admin office Tax exempt Not allowed to earn income Regional operating headquarters (ROHQ) Local operation in Phils. 10% of gross

19. Special Non-resident Foreign Corps. Nature Tax Rate Others Cinematographic film rentals 25% gross income Lessor of machinery, equipment, aircraft and others 7.5% gross income Lessor of vessels chartered by Philippine nationals 4.5% gross income Bareboat charter Agreement