Meaning of gross income:1.
- For sale of goods – Gross sales less sales returns, allowances, discounts and cost of goods sold.
- For sale of services – Gross receipts less sales returns, allowances, discounts and cost of services sold. Cost of services sold means all direct costs and expenses incurred to provide the services required by the customers and clients including (a) salaries and employee benefits of personnel, consultants and specialists directly rendering the service and (b) cost of facilities used directly in providing the service such as depreciation, rental of property and cost of supplies. In the case of banks, cost of services sold shall include interest expense.
- It shall also include all items of income enumerated under Section 32 (A) of the Tax Code, except income exempt from tax and income subject to final withholding tax.
Domestic Those whose taxable income are subject to the regular or normal tax rates of 32%, 35%,
Resident FC 30%. Not those enjoying preferential rates on their taxable income.
Effective, 1/1/98. (regular or normal rates then were: 1998, 34% and 1999, 33%) Provided it is already the 4th TY or beyond after commencement of its operations. Registration date with the BIR is the start of commencement of operations.Prorate TI for CY 2005 and if FY ended 11/30/05 or during 2009.
MCIT when: There is 0 taxable income or net loss In excess of the R/NCIT
When payable: Quarterly and annual bases. Simultaneous: (a) to filing the quarterly ITR (within 60 days from the close of each of the first 3 quarters of the taxable year); and (b) to filing the annual Final or Adjustment ITR (on or before the 15th day of the 4th month following the close of the taxable year).
Excess MCIT over R/NCIT paid: Creditable against the R/NCIT of the immediate following 3 years provided the R/NCIT is greater than the MCIT. The excess MCIT losses its creditability after 3 years.
Suspension of imposition (exception)
Proven substantial losses due to:
- Prolonged labor dispute (over 6 months)
- Force majeure (act of GOD or insurgency)
- Legitimate business reverses (fire or theft)
JONATHAN RUIZ CPA, MIB