RMC No. 76-2021: Clarifies the illustrative examples in the computation of Corporate Income Tax under Section 3(B) and 3(D) of Revenue Regulations No. 5-2021

Summary

RMC No. 76-2021 clarifies the illustrative examples in the computation of Corporate Income Tax under Section 3(B) and 3(D) of RR No. 5-2021.

Key points

1. Corrected amounts. In the illustration for the proprietary educational institution and the Regional Operating Headquarters (ROHQ), the Income Tax due and gross income were inadvertently written as P 1,000,000.00 and P 558,500,000.00. The correct amounts are P 100,000.00 and P 58,500,000.00, respectively.
2. Period of the 1% rates. The 1% Income Tax rate for proprietary educational institutions applies only from July 1, 2020 until June 30, 2023. The 1% Minimum Corporate Income Tax (MCIT) for ROHQ applies only from January 1, 2022 to June 30, 2023.
3. Reversion from July 1, 2023. Beginning July 1, 2023, the Income Tax rate for proprietary educational institutions reverts to ten percent (10%), and the MCIT reverts to two percent (2%).

Who is affected

• Proprietary educational institutions
• Regional Operating Headquarters (ROHQ)

Deadlines and effectivity

• 1% Income Tax rate for educational institutions: July 1, 2020 until June 30, 2023
• 1% MCIT for ROHQ: January 1, 2022 to June 30, 2023
• Reversion to 10% and 2%: beginning July 1, 2023

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.