4A Special DC

TAX ON SPECIAL DOMESTIC CORPORATIONS

Optional Standard
Income Taxpayer Tax Rates Exemptions Itemized Deductions Inter-Corporate Dividend MCIT IAET BPRT
Deductions
Personal 50K Additional 25K

GEN RULE: 10% of the Net Income (NIT) EXCEPT those subject to CGT and Passive Income subject to Final Tax.
1. Proprietary Educational Institutions and Non-Profit
(If Proprietary, Non-Profit and STOCK)
Hospitals p85, 86
EXP:
NOTE: Educational Institutions and Hospitals must both be
1. 30% On the ENTIRE taxable income (include income subject to tax and income which are exempt) - If the Gross Income from EXEMPT
PROPRIETARY (Privately Owned and with PERMIT to
Unrelated Trade, Business or Other Activity EXCEEDS 50% of the Total Gross Income derived from all sources. [Unrelated: not NO NO 10% N/A
operate from CHED, DECS or TESDA) and NON-PROFIT (no
related to institution's primary purpose] Dividends received by a DC
net income or asset accrues to or benefits any member of
specific person, with all the net income and asset devoted from another DC are EXEMPT
2. EXEMPT - If NON-STOCK/ Non-Profit PRIVATE Educational Institution or Hospital (See p87 Ingles - CIR VS DLSU) since the law assumes that
to the institution's purposes and all its activities EXEMPT (RR 9-
conducted not for profit - CIR vs St Lukes) the dividends received will
3. NCIT -If non proprietary and/or for profit 1998)
be injected to the CAPITAL
which will eventually be
taxed when the corporation
gets income from the use of
GEN RULE: EXEMPT from all taxes EXCEPT Net Income from such transactions as may be specified by the Secretary of Finance, such capital.
NOT APPLICABLE TO CORPORATE
upon recommendation by the Monetary Board to be subject to the regular Income Tax payable by banks. TAXPAYERS N/A p
2. Depositary Banks (FCDS) NO NO N/A
113
EXP: Final Tax of 10% on Interest Income from Foreign Currency Loans granted by such depository banks under said expanded
system to Residents other than Offshore Units in the Philippines or other depository banks under the expanded system.

GEN RULE: 30% NCIT

EXP: Exempt GOCCs:

GSIS
2% of Gross
3. Government Owned or Controlled SSS YES if taxed under NCIT. YES if taxed under NCIT. N/A p
N/A Income (p94 N/A
Corporations(GOCCs), Agencies and Instrumentalities PHIC Otherwise, NO Otherwise, NO 113
Ingles)
PCSO

NOTE: PAGCOR no longer exempt per RA 9337. Its income from gaming operations is subject to 5% franchise tax. Other income
from the operation of related services is subject to NCIT. Its contractees and licensees are subject to the same rule.