RR No. 7-2025 — Implementing the Amendments to Sections 27, 28, and 34 of the National Internal Revenue Code of 1997, as Amended by Republic Act No. 12066 (Date Posted: February 27, 2025)

Bringing In Revenues for Nation-Building BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE National Office Building Quezon City FEB 2 5 2025 PILIPINAS BAGONG

REVENUE REGULATIONSNO._0.0 7 -- 2 0 2 5

SUBJECT National Internal Revenue Code of 1997, as Amended by Implementing the Amendments to Sections 27, 28, and 34 of the Republic Act No. 12066

TO All Internal Revenue Officials, Employees and Others Concerned

SECTION I. SCOPE. -- Pursuant to Sections 244 and 245 of the Nationai Internal Sections 27, 28, and 34 of the Tax Code, specifically on: Revenue Code of 1997, as amended (Tax Code), in relation to Sections 1, 2, 4, and 32 of Republic Act (RA) No. 12066, these Regulations are hereby promulgated to implement

(1) reduced income tax rates for domestic and resident foreign corporations classified (2) additional allowable deductions from gross income under Section 34(C)(8) of the Same Code. as Registered Business Enterprises (RBEs) under the Enhanced Deductions Regime (EDR) as provided in Section 294(C) of the Tax Code; and

as amended by RA No. 12066, are as follows: SECTION 2. CORPORATE INCOME TAX RATES. - The income tax rates for domestic and resident foreign corporations pursuant to Sections 27 and 28 of the Tax Code.

A. DOMESTIC CORPORATIONS:

PARTICULARS INCOME TAX RATE EFFECTIVITY

Domestic corporations, in general 25 July 1,2020

Domestic corporations with net taxable income not exceeding Five Million Pesos (P5,000,000.00) and on which the particular business with total assets not exceeding One (P100,000,000:00), excluding land entity's office, plant and equipment are situated, during the taxable year Hundred Million Pesos 20% BUREAU OF INTERNAL REVENUE RECOROS MANAGEMENT IVISION -. FEB 27 2025 July 1, 2020

for which tax is imposed BY V admin unit" TIME 9:5000

BIR National Office Bldg.. Senator Miriam Defensor-Santiago Avenue, Diliman, Quezon City Trunkline: 8981-7000 : 8929-7676 Website: www.bir.gov.ph

PARTICULARS INCOME TAX RATE EFFECTIVITY

Sec. 294(C) of the Tax Code Domestic corporations classified as RBEs under the EDR as provided in 20 November 28, 2024

B. RESIDENT FOREIGN CORPORATIONS:

PARTICULARS INCOME TAX RATE EFFECTIVITY

general Resident Foreign Corporations, in 2% July 1, 2020

ResidentForeign classified as RBEs under the EDR as provided in Scc. 294(C) of the Tax Code Corporations 20 November 28, 2024

projects or activities shall be subject to the applicable inicomc tax rates. RBEs under the EDR, the corporate income tax rate of twenty percent (20%) shall apply starting November 28, 2024 and shall only cover the taxable income derived from registered projects or activities during each taxable year. Income from non-registered SECTION 3. APPLICABILITY OF THE REDUCED INCOME TAX RATE. - For

34(C)(8) of the Tax Code. SECTION 4. DEDUCTIBILITY OF INPUT TAX ATTRIBUTABLE TO VAT EXEMPT SALES. - Input tax paid on Iocal purchascs attributable to VAT-exermpt salcs shall be deductible from the gross income of the taxpayer in accordance with Section

have already filed their Annual Income Tax Return covering calendar year 2024 or fiscal year ending on or before the effectivity of these Regulations, the excess income tax payments as a result of the reduction of tax rate from twenty-five percent (25%) to twenty perccrit (20%) upon the cffectivity of RA No. 12066 may be carricd forward to the succeeding taxable quarter/year. SECTION 5.TRANSITORY PROVISIONS. - For RBEs who availed of the EDR and

provisions hereof shall remain in full force and effect. is subsequently declared invalid or unconstitutional, the validily of the remaining SECTION 6. SEPARABILITY CLAUSE. -- If any of the provisions of these Regulations

Regulations are hereby rcpcaled, amended or modified accordingly. SECTION 7. REPEALING CLAUSE. - All other issuances and rules and regu!ations or parts thereof which are contrary to and inconsistent with the provisions of these

2 YBUREAU OF INTERNAL BEVENUE RECORDS MANAGEMENT OIVISION 4 vH

FEB 2'7 2025

BY / ADMtN UNIT - 1 t 5:50pn .1

SECTION 8. EFFECTIVITY. - These Regulations shall take effect fifteen (15) days following its publication in the Official Gazette or the BIR Official Website, whichever comes first.

SHcretaryof Finance IPHGRECTO FER2 6 2025

Recommending Approval:

Rc VWI .LUMAGULJR BUREAUOF INTERNAL REVENUE J RECORDS MANAGEMENT DIVISON

Comyassioner of Interna Reventte

FEB 27 2025

1 ADMIN UNIT:1 S:SDPm S

BY The.

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