The Regular Corporate Income Tax (RCIT)

- Applies to all corporations in general. It covers all taxable income of corporations not subject to
a final tax or capital gains tax.
- 30% of taxable income

Corporate tax schemes on regular corporations:

a. Domestic Corporation- who may opt to be taxed at either, the corporate gross income tax or
The RCIT subject to the Minimum Corporate Income Tax (MCIT).
b. Resident Corporation- the RCIT subject to the Minimum Corporate Income Tax (MCIT).

The Corporate Gross Income Tax

- Effective January 1, 2000, Domestic Corporations have the option to be taxed at 15% of Gross
Income after satisfying such conditions:
1. A tax effort ratio of 20% of Gross National Product (GNP)
2. A tax ratio of 40% of income tax collection to total tax revenues
3. A VAT tax effort of 4% of GNP; and
4. A .9% ratio of the Consolidated Public Sector Financial Position (CPSFP)
Cost Ratio Limit- The option to be taxed based on Gross Income shall be available only to firms
whose ratio of cost of sales to gross sales/receipts from all sources does not exceed 55%.
Lock-in Period- the election of Gross Income Tax shall be irrevocable for 3 consecutive taxable
years during which the corporation is qualified under the scheme.

The Minimum Corporate Income Tax (MCIT)

- Most peculiar feature of Corporate Income Taxation.
- Corporations are subject to a MCIT of 2% of Gross Income.
- It is payable when,
a. The Corporation has 0 or negative taxable income.
b. MCIT > RCIT.