RMC No. 69-2023 — Reverts the rates of Percentage Tax, Minimum Corporate Income Tax, and Regular Corporate Income Tax on proprietary educational institutions and not for profit hospitals, pursuant to RA No. 11534 (Corporate Recovery and Tax Incentives for Enterprises Act [CREATE])

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BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHLIPPINES DEPARTMENT OF FINANCE National Office Building Quezon City BUREAU OF INTERNAL REVENUE Records mgt. division LULT NNITYN JUN 20 2023 0 16:66AM

JUN 2 0 2023

REVENUE MEMORANDUM CIRCULAR (RMC) NO. 6C_ - 2023

SUBJECT Reversion of Rates of Percentage Tax, Minimum Corporate Income

Recovery and Tax Incentives for Enterprises Act" Republic Act No. 11534, Otherwise Known as the "Corporate Tax, and Regular Corporate Income Tax on Proprietary Educational Institutions and Not for Profit Hospitals, Pursuant to

TO All Internal Revenue Officials, Employees and Others Concerned

6, 7 and 13 of Republic Act No. 11534, otherwise known as the "Corporate Recovery and Tax Incentives for Enterprises Act" (CREATE), as implemented by Revenue Regulations (RR) Nos 4-2021, 5-2021 and 8-2021, and as clarified by Revenue Memorandum Circular (RMC) Nos. 65-2021 and 67-2021, effective Julv 1. 2023: This Circular is issued to inform the public and all concerned that pursuant to Sections

1. The rate of percentage tax (PT) shall now revert to three percent (3%) of or gross receipts are not exceeding the PhP3.0 million threshold, except for gross quarterly sales or receipts of the taxpayer. This rate applies to corporations, self-employed individuals and professionals whose gross sales cooperatives and self-employed individuals and professionals availing of the eight percent (8%) income tax rate:

2. The rate of minimum corporate income tax (MCIT) for domestic and resident

of such corporations; and foreign corporations, including offshore banking units and regional operating headquarters, shall now revert to two percent (2%) based on the gross income

3. The rate of regular corporate 'income tax (RCIT) for proprietary educational institutions and hospitals which are nonprofit shall now revert to ten percent (10%) of their taxable income.

Based on the foregoing, the relevant taxes for taxable year 2023 shall be computed as follows:

A. Calendar Year

Total Tax Due Gross income/Taxable income/quarterly sales or Gross income/Taxable income/quarterly sales or receipts from July 1, 2023 to December 31, 2023 receipts from January 1, 2023 to June 30, 2023 Period MCIT/RCIT/PT 2%/10%/3% 1% PhP XXX PhP XXX PhP XXX Tax Due

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B. Fiscal Year

Gross income/Taxable income/quarterly sales or receipts from X month to June 30, 2023 Gross income/Taxable income/quarterly Period sales or MCIT/RCIT/PT 2%/10%/3% 1% PhP XXX PhP XXX Tax Due

receipts from July 1, 2023 to X month Total Tax Due PhP XXX

ILLUSTRATIONS:

1.MCIT (Domestic Corporations/ROHQ/OBUs)

A. Calendar Year

PhP1.400.000,000.00. with cost of sales of PhP560,000,000.00 and allowable ABC Corporation, a domestic trading corporation, has gross sales of

PhP480,000,000.00 includes the land and building in which the business operation is conducted, amounting to PHP100.000,000.00 and PhP125,000,000.00, respectively. deductions of PhP799,000,000.00 for calendar year 2023. Its total assets of

MCIT) Gross Sales Less: Ailowable Deductions Tax Due (PhP41,000,000 x 25%) Compare with MCIT: Less: Cost of Sales Gross Income Taxable Income Income Tax Payable (Higher between the regular income tax and January 1 - June 30, 2023 (PhP840,000,000.00/12) x 6 months x 1% July 1 -- December 31,2023 (PhP840,000,000/12) x 6 months x 2% Total MCIT Particulars 1,400,000,000.00 560,000,000.00 840,000,000.00 799,000,000.00 41,000,000.00 12,600,000.00 (In PhP) 10,250,000.00 12,600,000.00 8,400,000.00 4,200,000.00

B. Fiscal Year

fiscal year ending August 31, 2023, the computation of its income tax payable shall be Assuming the same information above, except that ABC Corporation has adopted a

as follows:

July 1 August 31, 2023 (PhP840,000,000/12) x 2 months x 2% Tax Due (PhP41,000,000 x 25%) Compare with MCIT: Taxable Income September 1, 2022 months x 1% Less: Cost of Sales Less: Allowable Deductions Gross Sales Gross Income - June 30, 2023 (PhP840,000,000.00/12) x 10 Particulars 1,400,000,000.00 560,000,000.00 840,000,000.00 799,000,000.00 10.250.000.00 (In PhP) 41,000,000.00 2,800,000.00 7,000,000.00

BUREAU OF INTERNAL REVENUE DnTIYyT JUN 20 Z823 V 005 6m Page 2 of 3

Records Mgt. DiviSion GVGI

MCIT Income Tax Payable (Higher between the regular income tax and Total MCIT 10,250,000.00 9,800,000.00

2. Income Tax for Proprietary Educational Institutions/Hospitals Which are Non-Profit

A. Calendar Year

PhP200,000,000.00, all of which are from related activities, with allowable deductions R&D Colleges, a proprietary educational institution, has gross income of of PhP160,000,000.00 for the calendar year 2023.

Gross Sales Less: Allowable Deductions Taxable Income Particulars 200,000,000.00 160,000,000.00 40,000,000.00 (In PhP)

Income Tax Payable July I - December 31, 2023 (Ph40,000,000/12).x 6 months x 10% January 1 -- June 30, 2023 (PhP40,000,000.00/12) x 6 months x 1% 2,200,000.00 2,000,000.00 200,000.00

B. Fiscal Year

If R&D Colleges has adopted a fiscal year ending in September 30, 2023, the computation of its income tax shall be as follows:

Gross Sales Less: Allowable Deductions Taxable Income Particulars 200,000,000.00 160,000,000.00 40,000,000.00 {In PhP}

Income Tax Payable July 1 - September 30, 2023 (Ph40,000,000/12) x 3 months x 10% October 1 - June 30,2023 (PhP40,000.000.00/12) x 9 months x 1% 1,300,000.00 I,000,000.00 300,000.00

possible. All revenue officials concerned are enjoined to give this Circular as wide a publicity as

GUI,JR Tom Haisson al Revenue

K- BUREAU OF INTERNAL REVENUE nmI JUN 20 ZS230 (6:0tAr)

RECoRdS Mgt. DiviSiOn 7GJI TUU

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