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  • Create Vs Train

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    The document compares the key tax provisions of the CREATE and TRAIN laws. Some key differences include: 1. CREATE lowers the corporate income tax rate to 25% from 30% and the minimum corporate income tax rate to 1% from 2%. 2. For individuals, CREATE lowers the tax on passive income like lottery winnings to 20% from exemption and lowers other percentage taxes to 1% from 3%. 3. CREATE provides deductions not previously available like a labor training expense deduction and longer net operating loss carryovers. It also expands VAT exemptions for medicines and educational materials.

    Original Description:

    Summary notes between CREATE LAW and TRAIN LAW

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    The document compares the key tax provisions of the CREATE and TRAIN laws. Some key differences include: 1. CREATE lowers the corporate income tax rate to 25% from 30% and the minimum corporate income tax rate to 1% from 2%. 2. For individuals, CREATE lowers the tax on passive income like lottery winnings to 20% from exemption and lowers other percentage taxes to 1% from 3%. 3. CREATE provides deductions not previously available like a labor training expense deduction and longer net operating loss carryovers. It also expands VAT exemptions for medicines and educational materials.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    16 views4 pages

    Create Vs Train

    Uploaded by

    iBEAY
    The document compares the key tax provisions of the CREATE and TRAIN laws. Some key differences include: 1. CREATE lowers the corporate income tax rate to 25% from 30% and the minimum corporate income tax rate to 1% from 2%. 2. For individuals, CREATE lowers the tax on passive income like lottery winnings to 20% from exemption and lowers other percentage taxes to 1% from 3%. 3. CREATE provides deductions not previously available like a labor training expense deduction and longer net operating loss carryovers. It also expands VAT exemptions for medicines and educational materials.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 4

    CREATE vs.

    TRAIN
    Summary
    (including provisions from Bayanihan Act)
    TRAIN CREATE
    GENERAL PRINCIPLES same same

    INDIVIDUALS

    1 Final Withholding Tax on PCSO Exempt 20%


    Winnings for NRA-ETB

    Other Percentage Taxes (OPT) 3% 1% from July 1, 2020 to June 30,


    2 2023

    CORPORATIONS
    1 RCIT
    DC 30% 25% / 20% starting July 1, 2020
    RFC 30% 25% starting July 1, 2020
    NRFC 30% FWT 25% FWT starting Jan. 1, 2021

    from July 1, 2020 to June 30,


    MCIT 2% 1%
    2 2023

    3 IAET 10% on IA income repealed

    Interest on foreign currency


    4 deposit under FCDS
    RFC 7.50% 15%

    5 CGT on sale of unlisted shares


    5% on first P100,000 10% on
    15%
    RFC and NRFC excess
    if requirements under Sec. 27D
    ordinary income exempt
    6 Dividends received by DC from FC are met

    Proprietary educational institutions 10% 1% from July 1, 2020 to June 30,


    7 and nonprofit hospitals 2023

    8 ROHQ 10% 25% starting Jan. 1, 2022

    9 OBU Exempt / 10% 25%

    PARTNERSHIP, CO-OWNERSHIP, JOINT VENTURE


    For taxable partnerships, co-ownership, JV
    1 RCIT 30% 25%

    2 MCIT 2% 1%

    ESTATE AND TRUST same same

    GROSS INCOME Tax exempt income under RA 11494 (Bayanihan Act II)

    DEDUCTIONS
    1 Nondeductible interest expense 33% of interest income 20% of interest income except MSMEs

    NOLCO incurred during taxable carried over for 5


    2 years 2020 and 2021 carried over for 3 years years

    additional deduction of one-half (1/2) of the value of labor training expenses (limit: 10% of direct labor
    3 Labor training expenses none cost)

    CAPITAL ASSETS same same


    INSTALLMENT REPORTING same same

    FRINGE BENEFITS same same

    DONOR'S TAX same same

    ESTATE TAX same same

    VALUE-ADDED TAX (VAT)


    1 Exemption on sale of a. Books a. Books
    b. Newspaper b. Newspaper
    c. Magazine review or bulletin c. Magazine
    d. Journal
    e. Review bulletin, or

    f. Any such educational reading material covered by the UNESCO agreement on the importation of
    educational, scientific, and cultural materials
    Exemption only applies to the Exemption includes the digital
    sale of physical copies or electronic format

    Exemption on drugs and Diabetes, high cholesterol and Diabetes, high cholesterol, hyptertension,
    2 cancer, mental illness, tuberculosis, kidney
    medicines hypertension
    diseases

    Expanded exemption for COVID- Capital equipment, its spare parts and raw materials, necessary for the production of personal
    3 no provision
    19 protective equipment components
    All drugs, vaccines and medical devices specifically prescribed and directly, used for the treatment of
    COVID-19
    Drugs for the treatment of COVID- 19 approved by the food and drug administration (FDA) for use in
    clinical trials
    OTHER PECENTAGE TAXES (OPT)
    Other Percentage Taxes (OPT)
    1 unde Sec. 116 3% 1% from July 1, 2020 to June 30, 2023

    2 Shares of stock sold through IPO 4%, 2%, 1% Repealed under Bayanihan Act II effective September 15, 2020

    EXCISE TAX same same

    DST same same

    LOCAL TAXES same same

    PREFERENTIAL TAXES same same

    REMEDIES same same

    FILING same same

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