THE PHILIPPINES: CIT Cuts Introduced for Domestic and Overseas Businesses
20 April 2021
The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Bill, which aims to lower corporate income tax rates and rationalise fiscal incentives, has now been formally adopted.
Also known as the Republic Act No. 11534, the legislation has been deemed to be retroactively effective as of 1 July 2020 and will see the corporate income tax (CIT) rate applicable to domestic corporations lowered to either 20% (in the case of smaller domestic corporations with a net taxable income not exceeding PHP5 million (US$103,409) and with total assets not exceeding PHP100 million) or 25% in the case of all other domestic corporations and resident foreign corporations. The previous applicable rate for both categories of business was 30%. In addition, as of 2022, each subsequent year will see a reduction of 1% in CIT for foreign companies until 2027, when the figure will stabilize at 20%.
- Southeast Asia