MANAGEMENT

Detailed explanation-1: -A: The MCIT is equal to two percent (2%) of the gross income of the corporation at of the end of the taxable year. “Gross income” means sales less sales returns, discounts and allowances and cost of goods sold.

Detailed explanation-2: -Domestic corporations Minimum corporate income tax (MCIT) on gross income, beginning in the fourth taxable year following the year of commencement of business operations. MCIT is imposed where the CIT at 25% is less than 2% MCIT on gross income. 2 (1% from 1 July 2020 to 30 June 2023)

Detailed explanation-3: -A corporation shall be liable to pay MCIT computed as 2% of gross income (revenue less cost of sales) if it has negative taxable income, or the MCIT is higher than 30% Regular Corporate Income Tax (RCIT).

Detailed explanation-4: -Minimum corporate income tax The MCIT is imposed when the standard 20 percent CIT is lower than the two percent MCIT on the company’s gross income. Any excess of the MCIT over the normal tax may be carried forward and credited against the normal tax for the three immediately succeeding taxable years.