How is corporate income tax calculated in the Philippines?

How do you calculate taxable income for a corporation?

Lesson Summary

  1. Corporations are separate, taxable entities and pay tax at graduated rates.
  2. Corporate taxable income is simply corporate gross income minus deductions allowable under US tax law.

What is the corporate income tax rate in the Philippines?

In general, the corporation tax rate is 25% for listed companies and is 35% for unlisted public and private limited companies. For Banks, insurance and other financial institutions, the corporation tax rate is 37.5% if listed and 40% if not listed.

What is a corporation’s taxable income?

A corporate tax is a tax on the profits of a corporation. The taxes are paid on a company’s taxable income, which includes revenue minus cost of goods sold (COGS), general and administrative (G&A) expenses, selling and marketing, research and development, depreciation, and other operating costs.

How do I calculate taxable income?

Now, one pays tax on his/her net taxable income.

  1. For the first Rs. 2.5 lakh of your taxable income you pay zero tax.
  2. For the next Rs. 2.5 lakhs you pay 5% i.e. Rs 12,500.
  3. For the next 5 lakhs you pay 20% i.e. Rs 1,00,000.
  4. For your taxable income part which exceeds Rs. 10 lakhs you pay 30% on entire amount.

How are corporations taxed?

The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This creates a double tax. The corporation does not get a tax deduction when it distributes dividends to shareholders. Shareholders cannot deduct any loss of the corporation.

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