MCIT is defined as minimum corporate income tax on gross income beginning the fourth

taxable year following the year of commencement of business operations (PWC, 2020). As of the
TRAIN Law, MCIT was imposed where the corporate income tax at 30% is less than 2% MCIT
on gross income. However, as of the creation of the CREATE law, this has subsequently been
reduced to 1% for domestic and resident foreign corporations (DivinaLaw, 2021). Additionally,
the regular corporate income tax had been reduced to 20% for domestic corporations with net
taxable income not exceeding P5 million and total assets not exceeding P100 million, excluding
the land where the business office, plant and equipment are situated. Moreover, if they do exceed
it, the rate would apply at 25%. Any excess of MCIT over RCIT in any particular year shall be
carried forward and credited against the regular income tax for the 3 years immediately
succeeding taxable years.

References
DivinaLaw (2021). CREATE Law series: part 1 amendments in corporate income taxation.
Retrieved from https://www.divinalaw.com/dose-of-law/create-law-series-part-1-
amendments-in-corporate-income-taxation/#:~:text=President%20Rodrigo%20Duterte
%20signed%20into,)%2C%20last%2026%20March%202021.&text=Minimum
%20corporate%20income%20tax%20(MCIT,1%20percent%20of%20gross%20income.
PWC (2020). Corporate – taxes on corporate income. Retrieved from
https://taxsummaries.pwc.com/philippines/corporate/taxes-on-corporate-income