Computation of the Minimum Corporate Income Tax for the Taxable Year 2023

In Republic Act No. 11534, also known as the “Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act,” the Minimum Corporate Income Tax (MCIT) rate was reduced from 2% to 1% for the period July 1, 2020, to June 30, 2023. Accordingly, the MCIT rate shall revert to the old rate of 2% based on the gross income of the corporation effective July 1, 2023. In the computation of MCIT, the gross income shall be divided by 12 months to get the average monthly gross income and apply the rate of 1% for the period January 1 to June 30, 2023, and 2% for the period July 1 to December 31, 2023.

For ease of computation, taxpayers may use the rates below, depending on their taxable period ending:

·       07/31/2023 - 1.08%

·       08/31/2023 - 1.17%

·       09/30/2023 - 1.25%

·       10/31/2023 - 1.33%

·       11/30/2023 - 1.42%

·       12/31/2023 - 1.50%

·       01/31/2024 - 1.58%

·       02/29/2024 - 1.67%

·       03/31/2024 - 1.75%

·       04/30/2024 - 1.83%

·       05/31/2024 - 1.92%

·       06/30/2024 - 2.00%

Please be guided accordingly.

Source: 

P&A Grant Thornton

Certified Public Accountants

P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd

As published in SunStar Cebu, dated 22 March 2024