Republic Act No.
11534
Corporate Recovery and Tax Incentives for Enterprises Act
I. Domestic Corporations
Regular Corporate Income Tax
Minimum Corporate Income Tax
Deductions from Gross Income
Improperly Accumulated Earnings Tax
Proprietary Educational Institutions
and Hospitals
Intercorporate
Dividends
II. Resident Foreign Corporations
Regular Corporate Income Tax
Minimum Corporate Income Tax
Deductions from Gross Income
BEFORE CREATE
30% Starting July 01, 2020*
- 25%; or
*Note: Taxable income deemed
earned equally for each month
of the year
- 20% , subject to below
conditions:
i. Net Taxable Income of not
more than P5M; and
ii. Total assets of not more
than P100M (excluding land
on which the business
entity’s office, plant
and equipment are situated)
2% 1%
(July 01, 2020 to June 30, 2023)
Additional deduction for Additional 50% deduction
labor training expense: for labor training expense,
- None subject to below conditions:
i. not to exceed 10% of direct
Non-deductible interest labor wage;
expense: ii. covered by apprenticeship
- 33% of interest income agreement; and
subjected to final tax iii. supported by DepEd,
TESDA or CHED certification
Non-deductible interest
expense:
- 20% of interest income
subjected to final tax
10% Repealed
10% of net 1%of net taxable income
taxable income (July 01, 2020 to June 30, 2023)
Dividends from NRFC Dividends from NRFC -
- 30% RCIT exempt from income tax
subject to below conditions:
i. reinvestment in the domestic
corporation
ii. 20% or more ownership; and
iii. 2 years or more holding
period.
BEFORE CREATE
30% 25%
Starting July 01, 2020
*Note: Taxable income deemed
earned equally for each month
of the year
2% 1%
(July 01, 2020 to June 30, 2023)
Additional deduction for Additional 50% deduction
labor training expense: for labor training expense,
- None subject to below conditions:
i. not to exceed 10% of direct
Non-deductible interest labor wage;
expense: ii. covered by apprenticeship
- 33% of interest income agreement; and
subjected to final tax iii. supported by DepEd,
TESDA or CHED certification
 Non-deductible interest
expense:
- 20% of interest income
subjected to final tax
ROHQs 10% of net taxable income 10% - 2021
25% - Starting
January 01, 2022
OBUs 10% of gross interest Subject to RCIT and
income from residents; other taxes
exempt for income from
non- residents;
exempt from other taxes
Final Tax on Passive Income Interest on FCDU deposits Interest on FCDU deposits
- 7.5% - 15%
CGT on unlisted shares CGT on unlisted shares
- 5% / 10% - 15%

III. Non-Resident Foreign Corporations

BEFORE CREATE
Regular Corporate Income Tax 30% on gross income 25% on gross income
Starting January 01, 2021
Final Tax on Passive Income CGT on unlisted shares CGT on unlisted shares
- 5% / 10% - 15%
Intercorporate Required tax credit in the Required tax credit in the
Dividends domicile country: domicile country:
- 15% -10% (starting July 1, 2020)

IV. VALUE ADDED TAX

Sale, importation, printing or
publication of books, any newspaper,
magazine
Sale or importation of capital
equipment, its spare parts and raw
materials,
necessary to produce PPEs and drugs,
including those for use in clinical
trials, drugs,
vaccines and medical devices for the
treatment of COVID-19
Sale or importation of prescription
drugs and medicines for cancer,
mental illness, tuberculosis, and
kidney diseases
BEFORE CREATE
Exempt provided it - Requirement to appear at
appears at regular regular intervals is removed
intervals - Digital or electronic format
included in the exemption
- Journal, or any educational
reading material covered by
the UNESCO agreement
included in the exemption
12% VAT VAT Exempt
(Jan. 01, 2021 to Dec. 31, 2023)
VAT exempt VAT exempt
Starting January 01, 2023 Starting January 01, 2021

V. PERCENTAGE TAX

BEFORE CREATE
Persons Exempt from VAT 3% 1%
(July 01, 2020 to June 30, 2023)