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THE
Bureau of Internal Revenue (BIR) is reminding domestic
and foreign corporations alike to file their quarterly
Minimum Corporate Income Tax (MCIT) on or before
November 30, 2007.
This is
in line with the recently issued Revenue Regulations
(RR) No. 12-2007 amending RR 9-98, which implements the
imposition of MCIT on domestic and foreign corporations.
In a
press statement, Internal Revenue Commissioner Lilian B.
Hefti stated the need for the amendatory provisions to
align the payment of MCIT with the quarterly filing and
payment of corporate normal income tax pursuant to
Sections 75 and 77 of the 1997 Tax Code, as amended, as
well as to clarify the amended, as well as to clarify
the definition of gross income for purposes of computing
the 2-percent MCIT.
The
statement says the computation and the payment of the
2-percent MCIT based on gross income shall likewise
apply at the time of filing of the quarterly corporate
income tax as prescribed in the aforementioned Tax Code
provisions.
For
purposes of computing the tax base, gross income subject
to the 2-percent MCIT shall include other items of gross
income realized or earned by the taxpayer, apart from
the income derived from core business activities during
the taxable period which are subject to the normal
corporate income tax. This means that the same includes
all items of gross income enumerated under Section 32(A)
of the Tax Code except income exempt from income tax and
income subject to final tax.
It
stated that if in the computation of the tax due for the
taxable quarter, the computed quarterly MCIT due appears
to be higher than the computed quarterly corporate
normal income tax, the quarterly corporate income tax to
be paid shall be the MCIT. Excess MCIT from prior
taxable year/s shall not be credited while expanded
withholding tax in the current and prior years,
quarterly corporate income tax payments under normal
income tax paid in the previous taxable quarter/s of the
current taxable year and quarterly MCIT paid in the
previous taxable quarter/s of the current taxable year
may be applied against the quarterly MCIT due.
However,
if in the computation of the tax due for the taxable
quarter, the computed quarterly normal income tax due
appears to be higher than the computed quarterly MCIT
due, then the quarterly corporate income tax to be paid
shall be the corporate normal income tax. Excess MCIT
from prior taxable year/s may now be applied in this
case in addition to the three items allowed as mentioned
above.
The
rules shall apply in the annualized computation of
corporate income tax at the end of the taxable year.
For
purposes, however, of the transitory quarter following
the effectivity of the regulations, the Revenue
Regulations No. 12 clarified that the computation of the
MCIT shall be done on a cumulative basis, covering not
only the current taxable quarter but also the previous
taxable quarters of the same taxable year. Thus, for
the third quarter ending September 2007 which is due for
filing on or before November 30 this year, the gross
income for the first and second quarters shall be added
to the gross income for the third quarter ended
September 2007 in order to get the cumulative gross
income subject to the 2-percent MCIT which shall then be
compared with the cumulative corporate income tax
computed under the normal income tax. Whichever is the
higher between the two shall be the basis for the tax
due for said transitory quarter. |
