er Iocome Tax on 7 Pm a Chapter 5 NrTiON OF TERMS 0 INCOME TAX ON ier tne Ci Casa precip soneceate wen ws | ~*~ ox more pera contbte mony, rope ends S common find wih the intention of aeding te watt CORPORATIONS Sesong themselves. (A. 1767) abate 7] Partnerships formed by persons for sole purpose of (Gee | exercising their common profession, no pact of the income G&D retin | Srhich is derived from engaging in any ado buono a cal andar eters pet differing from a partnership in that it relates to the Under Sec. 2 of the Corporation Code (Bates Pambansa aig « | "Mt" | disposition ofa single lot of goods, or the completion of we 2 ct apen |_| right of succession and the powers, attributes and properties qqn | ==~Geck | Constituted when group of individuals, acing jolly, Se sGienauen Dieelane (ieee | tee a one bat ae | brifial name, with an invested epi divided ito However fr income in purposes, the tern “corporation sal nde transferrable shares an lected board of directors and other 1. "Parerships no matter how ceated or organize, corporate characteristic, BUT operating without formal #)ectarne |<: [ooo seme 2 Joint accounts cena partspacin; War | Gonstuted when one itera Rasa in he basins of 4 Astocations or ecu | another by contbuting capital thereto, and sharing nthe Insurance companion Profit or loses inthe proportion agreed upon They are ot 4 Guten orannttty MecaeaTELn) |) ubjet to any formality and may be privately conrated orally ora wring aon swat | nid al organizations which Fave wibaatally he saint features of conporation tobe acble as sch 1 General fessional Partnership: and 2. ant Venture or Consortium formed 2. For the purpose of undertaking construction projec ot Engaging peseum, cml _gethemal nd ot operations pursuant to an operating or consortium agree ‘service contac with he goverment (Sz. 28] tT 251 CLASSIFICATION OF CORPORATIONS V Domestic Corporation = tel ofthe Philippines; » Foreign Corporations ~are tho: ‘eign aes * Resident — having a permanent establishmentforanch in the Philippines, ’ 7 acquiring residency for tax purposes or doing busi ‘nthe Philippines; Pisin ae ionsresident — no regu is corporation created and organized under se which are created and organized under ms permanent establishment in the Philippines; not "ly engaged in trade or business in the Philippines 252 aeer" Income Tax on Poy, Componiion “tase ‘mesic Corporation | Tosale Income fom sources wing the Philippines, nd oway RecideatFonign [Taxable Income fom sources yy Corporation Philippines thin Nonresident Fargn [GROSS SlsTRSGps fom are ya Corporation Philipines = TAX BASE ee. §$__§ —~—_| 1. Tax base or Regular Corpora Iicome Tax pirposs saab which othe gros income les allowable deduction aN 2. Forma Carport come Ta: he a sth Bow ig "Gross income” contemplated inthetox cede NaS ek (Grow ne oy resp ee oles ret, leounis ar alneeat try Cost Sales or Cato Services, 1. For Nowesident Foreign Corporation, the tat base te Gu SalesReeipls which generally ConnoesSalefRcsps less Dasa Returns and Allowances or Net alefReceips For reference: Gross Sales/Receipts xx Less: Discounts and Retuens fo Net Sales aa Less: Cost of Goods Sold foo) ‘Gross Income a ‘Less: Itemized Deductions/Optional (50) Standard Deduction ‘Taxable Income. =z sins T2* 4. Gross Income excludes items which are subject to Capital Gal Final Tax and those which are Exempt. anne gee ATE INCOMETAX 1 a rt el Cort am rN pista ome Taxot Normal income Te) foragers oe Corfu i ey ae dome orig, SeBeTE Lav A reduced_rac_ot 20% will apply to a domestic ‘set Taxable Income not exceeding, P5,000,000; and oral Assets not exceeding P100,000000 incase of corporations adopting the fiscal year accounting period, the taxable income shall be computed without regard to the specific date shen specific slares, purchases and other transactions occur. Their ‘scone and expenses forthe fiscal year shall be deemed to have been tamed and spent equally for each month ofthe period ‘Thecorporate income tax rate shall be applied on the amount computed, ty maliplying the number of months covered by the new rate within the fal year by the taxable income of the corporation for the period, Aivded by twelve, (Sec. 271A), Tax Code, as amended by the CREATE Law) RNa, 52021, implementing the above amendments, provide that for thetnable year 2020, the following steps willbe takers 2 Divide the taxable income for the yearby 12 months. ‘S Mattiply numberof months applicable tothe old rate by th resulting ‘eonthly taxable income; then multiply by 30% S Maliply number of months applicable to the new rate by the ‘euling monthly taxable income; then multiply by either 25% or 2% as applicable, ‘itthe computed regular income tax unde itemsband «(the same wa was provided for MCIT reduction from 2% to 1%) om RUSTRATION VAR Caption a dane alr as aio cof PIM forthe aenar ya ned Dee 1321 etl a 254 _Net Taxable Income Divide by 12 months Taxable Tncome pet month Tax Due: Tacs Ts PISGM Tachsive of and and Bullding, amoung aha P2SM, respectively. How much is the income tax der Since MVAA Corporation doesnot qualify forth re Sei tees sh January 1~ June 30,2020 (P57,500,00* P103.5ayoq) ae ORY 0.00009) in “PPS aang Forod | RCIT Rate Oier Domeatio Corporations with Net Taxable Income ofnot more than PSM and total asta ‘not more than P1O0M, cexclusive of land Bae 205% 25% 20% GTION; In the above iustation, the Tunable Tncome of wil be multiplied by the transitory rate of 27 50% to get err due of P189,750,000. Smonths * 90%) geal Gals Tax RATES fupTbec 520 (57500000° ——seaagy Emon 25%), tine Tou RTT Due “remy | somone asian [as | Tae For ease of computation the fllowing rmstoy rates were pron Tico shares of stock ofa | 15%" | On the net capital gain the under RNa 5202: Ses corporation nat ‘Sevand ated though ‘soaring Teed | RCH Tate | Oiler Domaz fel ste echange, held oaing Corporations |] |x epitalaoct (Se ‘able tncome ofrtmee| | [2ND12) than SMand lve | | [leo LAND andlor] “GR On the grow sling pe rotmorethanmion |] |RULDING in the| | orthe cent fai market scien Papin held as captal| | val atthe time of sal OR SOE. et 21D) whichever higher [aim 258% 26s Tess aD ary or ‘te tat for corporations, only sale of land andlor building held as capital ‘September 30,2020 | 28.75% 27.50%. eS sujet to the 6% CGT unlike an individual taxpayer who is Oeater 31,2020] —28530% 26 ‘ShlotheOS CT on sl of "rel propery” Acoringly a corporations Revenber 5, | 27ST 250% “traces thought maybe ced sel propery ed a miro | = Sot sujet the 6 COT ut to oxdnary income tx joa 3168 Heer zo_[ 70% wee Rishon th fect fhe TRARY for sl of shares tock of eerary 222i | 266 Be Praton not ned and aed rough loa sock exchange, Ari, 25.89% 21 25 255 ayy JWcomeTE on Cog, held as capital asset s that applicable to Foreign Corporatio ns, ae eeierooked and tis remained unchanged, ray Eorcign Comporntions (resent or non-resident) "Transaction Tate Taxing Tale of shares of stockofa ‘a the net capital gai Gomesticeorporation nat | 15%* | Notover LOD O00 listed and traded though @ Onany amount in, Jocal stock exchange, held P100,000 inf ascapital asset (Se, 281A ond sy) “As amended by the CREATE Law (prior to the amendment, th cp is subjected tothe 5/10% CGT rate) FINALWI ILDING T: ATES Domestic Comoratic Tate Tncome BOR | Interest rom any currency bank deposi, Viele] other monetary benefit from deposit substtes and from trust funds and similar arrangements nd Royalties. (Set 27(D][1) and See.281A}7Ia) 75% Interests from depository banks under the For Currency Deposit System. (Sec: 271DI3) end S 25141170 Tremp | Cash and/or property dividends from « doneti corporation’ BOGFWT | Interest Income from LONG TERM depost or30% | investment™ RIT Resident Foreign Corporations: the rates applicable to reside ose corporations are the same except for interests from depository bs sual the Foreign Currency Deposit System which is subject stilt theo 75% since the TRAIN package 1 did not amend the provisions Pe 257 ewer wer, ths as alendy Been amended 015% under the CREATE we 7 1 Dividends: is generally subject corpor aced Dividends: generally subject to regular corporat income trie the se aye teed as cmp upon meeting . ot vend actually received or remitted into the Philippines are , ite busines options oft amex operation nthe ines within the next taxable year from the time the foreign: idee ere eid serign sourced dividend shal only be niet fund the working Teg riremen capil expenditures, dividend payments cit etn domestic subsidiaries, and infrastructure prjedy AND lmfmetc corporation holds directly atleast 2% ofthe oustanding a ser the foreign corporation and has held the shareholdings for atthe time of dividend distribution. (Se, 2101 ss amende bythe CREATE Law, simplemente by BR No 5-202) terest from long-term deposits: Note that interest income from long-term, deposit or investment earned by individuals is exempt, subject to tax only in fae of pretermination. Under Revenue Regulations No. 14-2012, such ‘aenpion is limited only to individuals. Accordingly, interest eared by ‘cprations from long-term deposits is subject tothe following tax: 1. 20% FWT for interest income from long-term deposits issued by banks investment asd 2 {0% RCIT~ for interest earned from long-term deposits NOT issued by tanks or investment certificates NOT considered as deposit substitutes. (Q6AS of RMC No. 77-2012) gost Susttte: following the 19-lender rule (or the 20 or more lender te ads defined under Sec. 220) of the Tax Code deposit substitute ‘ean a alternative form of obtaining funds from the public public” ‘es borowing from 20 or more individual or corporate lenders at any other than deposits, through the issuance, endorsement, oF + pre of debt instrament fr the borowe’s awn account forthe ot relening or purchasing of receivables and other obligations, or ther own needs or the needs oftheir agent or dealer. 258 aIncome Taxon g, : Goverment issued securities are not automatically depogy under Se. 2() of RR No. 14-2012 the BIR provided that th jg Sued by the Goverment ining the Brena of Trg CSridened na anys obs egress ofthe rue Oy trimer ach deinen and sts gt | lor exchanged in secondary market However in Banc de Or Rp o th Pins the ge ee ec ctnng wir atten cons weeeinte:t oust comply with the 19-ender rule or the 2p 0 & ‘els and for purpsesof determining be"2) oor nde ge hy ane te” wold mean evry traneactonexeted in as Secondary market in connection with the purchase or sale of 4 just the orginal issuance. er ssh IRRling 0.270207 which nani here bonded te runbe of pce coxigination/issuance are considered deposit substitutes” was dateett! for it disregarded the 20 or mote lender rule under the Tax Code Grsodssinon brgoverment det isroments apse Sy pte corporation when the was none Inthe ln at yom 08) Non-Resident Foreign Corporation (Sec. 28(B]{1) and (Slla.} Tneome TA scars of nso: eres Veh Fp Fi Salaries premiums, annuities emoluments roe: determinable annual, periodic or casual gains, prot | income, and capital gains, except capital gaits se capital gains tax and those provided below (7% be CREATE Act) Interest on Foreign Laas Tntercorporate Dividends provided that the country whe the Company is domiciled provides for a 15% anit © Plipine taxes deemed paid* Interests from depository banks under the Fors #9 Deposit System_ Tate 5% 15% Exempt 259 - enon ULE Teen dite nome sits sated aeductony asa petmeethe regal corporate aoa citroen Peet ee et of 1S Pod tt fon ice taaR inteacfonaveben dine Papi ese See u she m any onthe vend we Lea Coy of Copia Je nen Rene rect rma ra Reem: Wind Pg iin coi MINIMUM. CORPORATE INCOME Tax (MCIT) Bere ves Sit oF cae sens thf Grass Income, whichis Nel Sie or Reverue (Gros sales ‘enue les discounts retums or allowances) es Cost of Sales o Services -REATE te shall, (The steps in computing for the transitory rate for AT salso applicable for MCIT) Cast of Sales or Services are those directly incurred in bringing about the eer or sales 1 Foratiaini or merchandising concern ‘ost of goods sold’ shall include the invoice cost of the goods sold, plus import duties, freight in tansportng the goods tothe place where the goods are actually sold, induding insurance while the goods ar in transit. 2 Foraman concetiy ‘ost of goods manufactured and sold’ shall include all costs of production of finished goods, suchas raw materials tse, diet Inbor and manufacturing overhead, freight cos, insurance FFealums and other costs incurred to bring the raw materials to the fadory or warehouse. me Inthe case of taxpayers engaged in th sale of service, ‘gross income’ "RS Bros receipts less sales returns, allowances and discounts less of services’ which includes: 260 eRSr reome Taxon Cap Satarie and employee Benefits of PEON! cong, the service; and specialist iret rendering the . Goto facilities utilized in providing the service such doy ‘or rental of equipment used and Cost of supplies. b. snes nnpitcrwateieen, ‘eho he an Teed Se ec cone a a = (Other income items: all other inconie shall be included in the {he cross Income subject to MCTT, except those exempt and thos final tx ie, sti So, manafcrig ey eang rental income ied real ice a computing the MTT even 1 a ong oe in of busines, WHEN APPLICABLE ‘A company is liable for MCIT starting the 4 year immediately the year in which it commenced its operations. Meaning, tthe Cap started operating in 2020 (regardless of the month), it willbe Habeas (provided it is higher than RCTT) starting 2024, which is the 4 year font (the year following the year in which it commenced operation). “The MCT does not apply to non-resident foreign corporations. Hoe Resident Foreign Corporations ae also isle fr MCTT under Sec 2 the Tax Code. ‘When due: The tax due shall be equivalent tothe MCIT wheneveritishi) ‘than RCIT. same. a5 RCT, Accordingly, ts computation fs done quarteny, sme as ACTA ‘cumulative basis (Le, the income and expenses from we included in the preparation of the >t quarter return an oon) TS taxable quarter, the MCT is higher than the RCIT, the forme: 0°) amount due for payment less any availabe tax credits 261 tk axe wt EK sf Any exes of the MCTT ove the RCTT habe cared forward se esed iat mma ts (RCI) forthe thee G) immediately Seg leven sto be credited, the RCT shoul be igher han the MCT: de hve succeeding taxable yea, the MCT is higher han the ris it ess MCTT carry-over would expire and would no longer be Fe tp sng the accounting entry for excess MCTT carry-over would be: eooting wision for income tax/income Tax Expense 0K 7x rove charge - MCTTMCT Cary over Wome Tax FayblelCash ox ison fr income othe iacome tat expense woud be equivalent PE Frmal tx (RCIT), while the Income Tax Payabe/Cash would be 1 feta he MCT. The dfference seated aan abet which may be ‘Sr opis he RTT inthe succeeding 3 eas where RCT is higher {oRMAT OF COMPUTATION: SuelRevensesReceips/Fees 20x us Cost of salesfservies e009) Gus nome from Operations 5x Ad Oer Taxable Income 200% ‘eal Gross Income A) 3x ‘es temized Deductions/Optional Standard Deduction | _00X) Taable income () 5HX Regular Corporate income Tax (RCIT) 30% of Taxable x soe 8) Mrinum Corporate Income Tax (MCTT) 2%, of Total 00x is Income (A) THDre(whicheveris higher) rox ayr / Income Ta on Gop If RCIT is higher: less Unexpired excess of prior year’s cr Oy Balance , na Less: Tax credits ry Prior year’s excess ax credits other than MCIT. Sy ‘Tax payments forthe fist three quarters Creditable tax withheld forthe first three quarters 53° reditabe tx withheld forthe fourth quarter 3 Foreign tax credits, if applicable ‘Tax paid in return previously filed, ‘amended return a, Tax PayableOverpayment) eR Rete From (Sec. 271613, Tex Coe ‘The Secretary o Finances authorized to suspend the iposion ‘on any corporation which suffers losses on account of; ten 1. Prolonged labor disputes: losses arising from a strike spe Ce A ee ee oe ely, which has caused the temporary shutdown of business operatan 2. Because of free majeure: means a cause due to irresistible fre God” like lighting, earthquake, storm, food and the lke Tastee also include armed confit ike war or insurgency. 3. Legitimate business reverses! include substantial Tosses de | robbery theftor embezzlement, or other economic reasons a deem by the Secretary of Finance. ConroRATIONs Nor SusEcr To MCIT 1. Propriety educational institutions subject tothe tax of 10% (nw 2. Non-profit hospital subject to 10% tax (or now 1%, 3 Depository banks under the expanded foreign currency depot (Foreign Currency Deposit Units [FCDU}) for offshore income = from income tax and onshore income subject 10 10% final tax) 4. Offre banking unit similarly taxed as FCDUs (except thst we (CREATE Law, OBUSs are now subject to regular taxes and ths cm; 5. Intemational carriers subject to 2.5% tax on Gross Philippine Bal 263 senso bjt to 10% tax (reventusly the 25% RCIT under the CREATE 0H eas itmay aso be subject oer) Ae rd nti ncome bjt TH th 1 Con nome ao sibel i * atte MCTT i due ony Ii higher than the 30 RCI anal the gato pe ot subject othe 30% RCI. However wot re eHrEZA. and DOLregitred ents, whch are not covered ty hy 100s sor exemption (tose subject 03% RCI} are ikewiee suet ves rpever applicable, SECT, whenever app wet preferential GIT ler the CREATE); IpROPERLY ACCUMULATED EARNINGS Tax Sle te CREATE Law the TAET has aleady been repeated. Thus it wil er appy to corporations’ entize sal ear ending after the efecto “TICEREATE Law which s April 11,2021 s provided under RRNo. 52024 GUSIRATION: DS Corporation a domestic corporation, has teoppropiated retained earnings in excess ofits paid-up capital stock Smourting 10 P20M and PSOM fo the fiscal years ending june 30,2020 and jan 302021, respectively ps Corporation stall be Subject tothe 10% IAET as &f June 30,200. Hove JDS Corporation shall no longer be subject to the TAET forthe tec year ending June 3, 2021, which safer ec (CREATE. + % aoe ew points on discussion are in the multiple choice questions, OrtONAL CORPORATE INCOME TAX (Gross INCOME Tax) Tan a seek a ‘sha been repeated under the CREATE Law 264 eRer PcoMe TO On Cap, sy, SPECIAL CORPORATIONS i si 1 Cont 1ONs ay Speier poston | Ti mm a Topay Eien | Tele ad Morena | a sere Map Ge ZI | ne [ec age Code) 50% Ser ek ae] ee Se inanaee [nines | PEEL, 1987 Constitution) a cmematord =} cent tapers || SS waa spar onetenins |S [Se om Saalincee one na “Under the CREATE Law, the rate shall be 1% from July 1, 2020 to ue 2023, "Unrelated trade, business or other activity’ are those which ws substantially related tothe eerie or performance ofthe schol ora primary purpose or function Thus, whenever such income is morths Of the total income ofthe proprietary educational institation or hospital alts income becomes subject to 30% (now 25%) RCT. Deduction: for private educational institutions, capital outlis © ‘expenditures made for expansion of schoo! facilities may either be: a. Deductedas expenditure; or ». Depreciated overestimated life a Note that for other corporations, the capital outlays and expense only be treated as outright expense if, for accounting purpes® Ty determined as repairs and maintenance; while it may °° 265 isons ple a forms part of He COs of he ase if considered a uch for ig PTO pit extends not only to the revenues and income of asset ly school operations ike ton and cna lon and miscellaneous fees but seston ome Goel rom ces sn es er a ties which are owned ancl operated by the school itelf andl ‘ . ‘ee he cmps. DOF Dorner 37) . ns pert mer consis een ugha ise se niponal te Ne Howeee noe nea ee eect nversity 2. CIR (CTA Case No. 7246 dated March 11,2010) the CTA sa ican te operated sconce hee stro» Nonsock Nonprott Eatealnaiaens teas see bres eyo td mally, daly and coer Steps “\GOVERNMENT-OWNED OR -CONTROLLED CORPORATIONS CENERAL RULE: subject to regular corporate income tax. = CEPTIONS: The following are tax-exempt government owned of utoled corporations under See. 27(C) ofthe Tax Code: Government Service Insurance System (GSIS) Social Security System (SSS) Philippine Health Insurance Corporation (PHIC); and cal Water Districts, 7 oe Drape Mtl Fund HOME sind bythe ‘CREATE Law) et fe econ aS: : lst Genera Principle of nation ude Exemption $Gorerment inherent Limitation moe si FOREIGN Corrorati % eee Tartare Taste oot |S Fiipe ing 2% ly a> Income Tax on, —s Spec FE_[— acta Giishore Tanker the CREATE, OBS a howe RR banking units | subject to the regular income tay | "Ct" (OB) Gee | (previously taved similar FCDUD | 29D ; mime Foreign ‘itihare Tacoma = neome Kom Tosigy Se ee emecs ma ae | Be Sepert Unit esidents Offshore Banking Una | “SA (FCDUs) (OBUs) in the Philippines, toca |" Commercial banking, units inching Philippine branches of foreign bane tinder the foreign curency” depost system Crshore come - Interest income from | oti foreign currency loans granted to residents other than other OBUs or local || ecumercial banks under the: gn || * | currency deposit system. scr Branch Profit ‘pplisd or earmarked for Remitance Tax” | remittance without deduction for the tax | 15 =25A](5) | component | Regional or area * headquarters of Ms rmltnationals™ {-aimpbmtey (Sec. 28,A][6)[a])_ Regional cing is headquarters of ‘Taxable Income 108 ruliatonals [(Sec. 28{A]f6}[]) “Gross Philippine Billings for: ippine Billings er) a. Intemational air carrier refers to the amount of gross from carriage of persons, excess baggage, cargo, oF mal aint the higgins in a continuous and uninterrupted fight Se" 267 ponent tesue and the place of payment ofthe ticket or tse passage pete 28{A]I3IlaD Provided, that tickets revalidated, exchanged tet ater international iin for pat ofthe Gross sens psenge Bsr plane in ot po a mines : tnat for a flight which originates from the Philippines, but P aie nesta cote theallguet pon a eet of he thle own fom te Plppees tbe pot of sere for part of he Grows Phlpine Bigs aN 189) earring ame qoe revrue wither for pessenge, i ang fom he Plas opt fal seston oa te tan ea ee ee Feiments. Gee 25(A]131) awn ander reciprocity: international carriers doing business in the ‘ain may aval ofa preferential rate or exemption from the tax herein Spud onthe basis of applicable tax treaty or intemational agreement to ‘Biehthe Philippines is a signatory or on the bass of reciprocity such that an Temaooal carter, whose home country grants income tax exemption to Thappine cavers shal likewise be exempt from the tax imposed under this son. as amended by RA No. 10378) {Mob income: of an international cartier that may be derived from the Pipines other than those that qualify as Gross Philippine Billings, will be ‘bjcto the regular corporate tax rates) ‘(TzA‘epistred entities are exempt from the imposition of the oe pt from the imposition of the Branch “ional signal ot area headquarters 8 branch in the Philippines by a pany and which headquarters do not eam or derive =e Patines and which act a speroory,conmnietions and Peep emer for thelr afiliates, subsidiaries or branches in the Asia lon and other foreign market. a- come Taxon, ‘-Regional operating headquarters are those branches estajy Philippines by multnatonal companies to oferrevige ate bate te Phipps ty ange in diferent sc es) ‘administration and planning, business planning and coord ‘contro and sales promotion et. ination mt ing January 1, m Income Tax Rate, (98 amended by the CREATE Law) SSrecIAL.NON-ResipENT FOREIGN CoRFORATION (Sec 26/012.3 ont) Span RFC Ta Bise Nowresient Gros ese fom Pipae Sipematographic film | sources = rune eso or ditt Norersident owner or | Gost wena or fey day lessor of wvithi the Paippines | FR rmachineries and other ‘uipment Noreresident_owner or] Grow Tenala Tease oF Gia les of vets crt | fees rom later or charters by Pilippne nationals | Flipinoclizne or corporations |g as approved by Martine Industry Authory TAX EXEMPT CORPORATIONS Sec. 30 ofthe Tax Code enumerates the following corporations whi exempt from the Tax on Corporations: ‘A. Labor, Agriculture, or Horticultural Organization’ not ora principally for prof B, Mutual Savings Banks and Cooperative Banks C. Fraternal Beneficiary Society, Order or Assocation} D. Cemetery Companies owned and operated exchsively fr its members; E. Religious, Charitable, Scientific, Athletié or Cultural Corporatio the be 269 ee xrorewst pas gn, Chamber of Commer road of Tae Len rofl Eaton lsitatone 1 Neat Educational Institution H re Insurance Companics and Like ions, si rower oe Acne E b . fr shal income from Whatever Kind and char oregon cera ny fh peri, el or pana or em ey of Lommel pln pono geome - ye jee Hospital with paying patentsAn institution under Section 30E) or ot lose its tax exemption if it ears income from is for-profit (0, Sah income rom fr profit activities, under the ast paragraph of fo, is merely subject f0 income tax, previously at the ordinary see ate but now at the preferential 10% rate pursuant to Section 278) we 5 Lake's Medial Center, In. GR No, 203514, Feb. 13, 2017 and GR Nos (Goren 125960, Seplember 26,2012) tunstek Now-Proft Educntonal Institution! The last paragraph of Sec. 30 is tnrappeable to a Nor-Stock, Non-Profit, Educational Institution, whose (hate though earned fom a commercial activity, is sil exempt as long a5 TSUSED actualy, dizectly and exclusively for educational purposes (this is prides of source). (CIR vs. De La Salle University, Inc, GR No. 196596, ener 9, 2016)