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    REVENUE REGULATIONS NO. 12-2007 Issued On October 17, 2007 Amends Certain

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    JolinaBanawa
    This document summarizes changes made by Revenue Regulations No. 12-2007 regarding the payment of Minimum Corporate Income Tax (MCIT) by domestic and resident foreign corporations. Key changes include: 1) MCIT of 2% of gross income must now be computed and paid on a quarterly basis at the time corporate quarterly income tax returns are filed. 2) Excess MCIT from previous years cannot be credited against quarterly MCIT due but can be credited against annual normal income tax if higher. 3) In computing annual income tax due, various tax credits from the current and previous years can be claimed against either the annual MCIT due or annual normal income tax due, whichever is higher.

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    REVENUE REGULATIONS NO. 12-2007 Issued On October 17, 2007 Amends Certain

    Uploaded by

    JolinaBanawa
    68 views2 pages
    This document summarizes changes made by Revenue Regulations No. 12-2007 regarding the payment of Minimum Corporate Income Tax (MCIT) by domestic and resident foreign corporations. Key changes include: 1) MCIT of 2% of gross income must now be computed and paid on a quarterly basis at the time corporate quarterly income tax returns are filed. 2) Excess MCIT from previous years cannot be credited against quarterly MCIT due but can be credited against annual normal income tax if higher. 3) In computing annual income tax due, various tax credits from the current and previous years can be claimed against either the annual MCIT due or annual normal income tax due, whichever is higher.

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    37123rr 12-2007

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    This document summarizes changes made by Revenue Regulations No. 12-2007 regarding the payment of Minimum Corporate Income Tax (MCIT) by domestic and resident foreign corporations. Key changes include: 1) MCIT of 2% of gross income must now be computed and paid on a quarterly basis at the time corporate quarterly income tax returns are filed. 2) Excess MCIT from previous years cannot be credited against quarterly MCIT due but can be credited against annual normal income tax if higher. 3) In computing annual income tax due, various tax credits from the current and previous years can be claimed against either the annual MCIT due or annual normal income tax due, whichever is higher.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    68 views2 pages

    REVENUE REGULATIONS NO. 12-2007 Issued On October 17, 2007 Amends Certain

    Uploaded by

    JolinaBanawa
    This document summarizes changes made by Revenue Regulations No. 12-2007 regarding the payment of Minimum Corporate Income Tax (MCIT) by domestic and resident foreign corporations. Key changes include: 1) MCIT of 2% of gross income must now be computed and paid on a quarterly basis at the time corporate quarterly income tax returns are filed. 2) Excess MCIT from previous years cannot be credited against quarterly MCIT due but can be credited against annual normal income tax if higher. 3) In computing annual income tax due, various tax credits from the current and previous years can be claimed against either the annual MCIT due or annual normal income tax due, whichever is higher.

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    REVENUE REGULATIONS NO.

    12-2007 issued on October 17, 2007 amends certain


    provisions of Revenue Regulations (RR) No. 9-98 relative to the due date within which to pay
    the Minimum Corporate Income Tax (MCIT) imposed on domestic corporations and resident
    foreign corporations pursuant to Sections 27(E) and 28(A)(2) of the Tax Code, as amended.
    An MCIT of two percent (2%) of the gross income as of the end of the taxable year
    (whether calendar or fiscal year, depending on the accounting period employed) is imposed
    upon any domestic corporation beginning on the 4th taxable year immediately following the
    taxable year in which such corporation commenced its business operations. The MCIT shall be
    imposed whenever such corporation has zero or negative taxable in come or whenever the
    amount of MCIT is greater than the normal Income Tax due from such corporation.
    Notwithstanding the above provision, however, the computation and the payment of
    MCIT, shall likewise apply at the time of filing the quarterly corporate Income Tax as prescribed
    under Sections 75 and 77 of the Tax Code, as amended.
    Thus, in the computation of the tax due for the taxable quarter, if the computed quarterly
    MCIT is higher than the quarterly normal Income Tax, the tax due to be paid for such taxable
    quarter at the time of filing the quarterly corporate Income Tax Return (ITR) shall be the MCIT,
    which is 2% of the gross income as of the end of the taxable quarter. In the payment of said
    quarterly MCIT, excess MCIT from the previous taxable year/s shall not be allowed to be
    credited. Expanded withholding tax, quarterly corporate Income Tax payments under the normal
    Income Tax and the MCIT paid in the previous taxable quarter/s are allowed to be applied
    against the quarterly MCIT due.
    The quarterly MCIT paid on the quarterly ITR shall be credited against the normal Income
    Tax at year end if in the preparation and filing of the annual ITR and in the final computation of
    the annual Income Tax due, it appears that the normal Income Tax due is higher than the
    computed annual MCIT. Moreover, in addition to the quarterly MCIT paid and quarterly normal
    Income Tax payments in the taxable quarters of the same taxable year, excess MCIT in the prior
    year/s (subject to the prescriptive period allowed for its creditability), expanded withholding
    taxes in the current year and excess expanded withholding taxes in the prior year shall be
    allowed to be credited against the annual Income Tax computed under the normal Income Tax
    rules.
    However, if in the computation of the annual Income Tax due, the computed annual MCIT
    due appears to be higher than the annual normal Income Tax due, what may be credited against
    the annual MCIT due shall only be the quarterly MCIT payments of the current taxable quarters,
    the quarterly normal Income Tax payments in the quarters of the current taxable year, the
    expanded withholding taxes in the current year and excess expanded withholding taxes in the
    prior year. Excess MCIT from the previous taxable year/s shall not be allowed to be credited
    therefrom as the same can only be applied against normal Income Tax.
    For purposes of these Regulations, the term, normal Income Tax means the income tax
    rates prescribed under Sections 27(A) and 28(A)(1) of the Code at 34% on January 1, 1998; 33%
    effective January 1, 1999; at 32% effective January 1, 2000 and 35% effective November 1,
    2005 and thereafter. Provided, however, that effective January 1, 2009 the rate of Income Tax
    shall be 30% pursuant to RA No. 9337.
    The taxpayer shall pay the MCIT whenever it is greater than the regular or normal
    corporate Income Tax which is imposed under Sections 27(A) and 28(A)(1) of the Tax Code.
    The final comparison between the normal Income Tax payable by the corporation and the MCIT
    shall be made at the end of the taxable year and the payable or excess payment in the annual ITR
    shall be computed taking into consideration corporate Income Tax payment made at the time of
    filing of quarterly corporate ITR whether this be MCIT or normal Income Tax.
    The term gross income means gross sales less sales returns, discounts and allowances
    and cost of goods sold, in case of sale of goods, or gross revenue less sales returns, discounts,
    allowances and cost of services/direct cost, in case of sale of services. This rule,
    notwithstanding, if apart from deriving income from these core business activities there are other

    1
    items of gross income realized or earned by the taxpayer during the taxable period which are
    subject to the normal corporate Income Tax, the same items must be included as part of the
    taxpayers gross income for computing MCIT. This means that the term gross income will
    also include all items of gross income enumerated under Section 32(A) of the Tax Code, as
    amended, except income exempt from Income Tax and income subject to final withholding tax.
    The MCIT shall be paid in the same manner prescribed for the payment of the normal
    corporate Income Tax which is on a quarterly and on a yearly basis. It shall be covered by a tax
    return designed for the purpose, which will be submitted together with the corporation's annual
    final adjustment ITR. Domestic corporations shall be required to pay the MCIT on a quarterly
    basis, pursuant to the provisions of Sections 75 and 77 of the Tax Code in relation to Section
    245 of the same Code, as amended.
    In the filing of the quarterly ITR for the taxable quarter which is due for filing after the
    effectivity of these Regulations, the computation of the MCIT shall be done on cumulative basis
    covering not only the current taxable quarter but also the previous taxable quarters of the same
    taxable year. Such computed MCIT shall be compared with the cumulative normal Income Tax,
    whereupon the higher amount between the two shall be the basis of the quarterly Income Tax
    payment to be made for said taxable quarter.
    Thus, for those using calendar year basis accounting period, in the filing of the quarterly
    ITR for the third quarter ended September 2007, which is due for filing on or before November
    29, 2007, the gross income for the 1st and 2nd quarters shall be added to the gross income for the
    quarter ended September 2007, the total of which shall be the basis of the 2% MCIT which shall
    then be compared with the computed cumulative normal Income Tax. The cumulative MCIT for
    the three (3) said quarters shall be paid in case the same appears to be higher than the normal
    Income Tax computed for the same period. Excess normal Income Tax carried over from
    previous taxable year and payments made for the previous qua rters of the same taxable year,
    including withholding tax credits claimed for said previous quarters of same taxable year shall
    be credited against the computed tax due in the cumulative quarterly tax return.

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