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Tax Notes: BIR clarifies Corporate Income Tax issues under the Create Act

SunStar + June 02, 2021 The Bureau of Internal Revenue (BIR) has addressed the questions and concerns of taxpayers and stakeholders on corporate income taxation in its Revenue Memorandum Circular (RMC) 62-2021 issued on May 17, 2021. The RMC clarifies BIR Revenue Regulations (RR) 5-2021. Which corporate income tax rate should be used? Under the Corporate Recovery and Tax Incentives for Enterprises (Create) Act, domestic corporations may be subjected to a lower regular corporate income tax (RCIT) rate of 25 percent starting July 1, 2020. Meanwhile, corporations with net taxable income not exceeding P5,000,000 and total assets not exceeding P100,000,000 excluding the land on which the particular business entity’s office, plant and equipment are situated, are subject to a much lower RCIT rate of 20 percent.

Peza: Vetoed provision in Create Law may prompt investors to leave PH

SunStar + April 08, 2021 THE Philippine Economic Zone Authority (Peza) has warned that locators may leave the country because of one of the items vetoed by President Rodrigo Duterte which may have a big effect on the country’s existing foreign direct investors. This was the removal of the extension of availment of tax incentives by existing registered business enterprises (RBEs) given that the “extension of incentives for existing projects is unfair to ordinary taxpayers / unincentivized enterprises and further, only new activities and projects deserve fresh incentives.” Under the Corporate Recovery and Tax Incentives for Enterprises (Create) Act, RBEs have no choice but to make do with the 10-year sunset period (after the lapse of income tax holiday) and thereafter, graduate to the regular 25 percent corporate income tax rate.

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