Optional Corporate

Income Tax
 Optional Corporate Income Tax
Effective January 1, 2000 allow domestic and resident
foreign corporation to be subjected to optional
Corporation tax of 15% based on Gross Income

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Requisites
All of the following condition shall have to be satisfied in the allowance of
Optional and Corporate Tax

1. A tax effort ratio of 20% of Gross national Product.

2. A ratio of 40% of Income tax collection of total tax revenue.
3. A VAT effort of 4% of GNP; and
4. A 0.9 ratio of the consolidated public sector financial position to GNP.
5. The option to be taxed based on gross income shall be available to firms
whose ratio of cost sales to gross sales, or receipts from all sources does not
exceed 55%.

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 “
The election of gross income option by the
corporation shall be irrevocable for the three
(3) consecutive taxable years during which
the corporation is qualified under the scheme.

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Sales/Revenues
Pxx
Cost of Sales/Cost of direct services
(xx)
Gross income
xx
Gross income tax rate
15%
Income tax due
Pxx
Less: Taxes withheld
(xx)
Taxes paid – Previous Quarters
(xx)
Foreign tax credits
(xx)
Income tax payables
Pxx
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