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 Digest | Full Text

trAU UT IN I trXNAL KtrYtr NUE REPUBLIC OF THE PHILIPPINES It JUil rrtru ll: ?,0 ar'.) DEPARTMENT OF FINANCE tiE Ct)rillS tvtt.l I. OlVl St( ) fY BUREAU OF INTERNAL REVENUE Quezon City June ll,202l REvENUE MEMoRATvDUM cTRCULAR No. rlb - l,oal SUBJECT Clarification on the Illustrative Examples in the Computation of TO Corporate Income Tax Under Section 3(B) and 3(D) of Revenue Regulations No. 5-2021 All Revenue Officers and Employees and Others Concerned Revenue Regulations (RR) No. 5-2021. which implemented the income tax provisions of Republic Act No. 1 1534 or the "Corporate Recovery and Tax Incentives for Enterprises Act " (CREATE Law), includes illustrative examples on how the income tax of corporation shall be computed. In the illustration under Section 3(B) and 3(D) of RR No. 5-2021 for proprietary educational institution and Regional Operating Headquarters (ROHQ), however, the income tax due and the gross income were inadvertently written to be in the arnount of Pl,000,000.00 and P558,500,000.00 instead of the correct amount of P100,000.00 and P5 8,,5 00. 000.00, respectively. Hence, to avoid confusion, this Circular is being issued to clarify the aforesaid amounts, now correctly shown in the tables below: ..8. PROPRIETARY EDUCATIONAL INSTITUTIONS xxx Related activities Unrelated Total Activities Gross Receipts/Sales 10,000,000.00 8,000,000.00 18,000,000.00 2,000,000.00 3,000,000.00 5,000,000.00 Less: Cost of Service/Sales 8,000,000.00 5,000,000.00 Gross Income 1,000,000.00 2,000,000.00 13,000,000.00 Less: Allowable Deductions 7,000,000.00 3,000,000.00 3,000,000.00 NET TAXABLE INCOME REGULAR RATE xxx 10,000,000.00 TAX DUE t% 100,000.00 xxx xxx D. REGIONAL OPERATING HiIAOQUARTERS Annual Income TY 2420 TY 2021 TY 2022 TY 2023 Cost of Services Gross Income 75,000,000.00 120,000,000.00 130,000,000.00 75,000,000.00 41,250,000.00 66,000,000.00 71,500,000.00 41,250,000.00 33,7 50,000.00 54,000,000.00 58,500,000.00 33,7 50,000.00 i rr i

TY 2020 TY 2021 TY 2022 TY 2023 Allowable 33,625,000.00 41,200,000.00 42,550,000.00 35,125,000.00 Deductions 125,000.00 12,800,000.00 15,950,000.00 (1,375,000.00) Computation of Income Tax Due Net Taxable I 25,000.00 12,800,000.00 15,950,000.00 (1 ,37 5,000.00) Income/Gross Income Multiply bv t0% t0% 25% 25% 1,280,000.00 3,987 ,500.00 0.00 Income Tax Due 12,500.00 N/A 58,500,000.00 33,7 50,000.00 MCIT: N/A 1% 1.50 * Gross Income 585,000.00 506,250.00 P 3,987 ,500.00 P 506,250.00 MCIT Rate MCIT Income Tax Due xxx xxx xxx" This Circular likewise clarifies that the 7oh income tax rate for proprietary educational institutions and the l% Minimum Corporate Income Tax (MCIT) for ROHQ shall be imposed only for the period July 1,2020 until June 30,2023, ffid January 1,2A22 to June 30, l, 2023, respectively. Thus, beginning July 2023, the income tax rate for proprietary educational institutions and the MCIT shall revert to ten percent QA%) andZoh, respectively. A11 are enjoined to give this Circular a wide publicity as possible. 2lffwtilt'*) CAESAR R. DULAY Commissioner of Internal Revenue Il 0437e 7 BUREAU OF INTERNAL REI/ENUE R .n l- - $,'rrN