Tuesday, November 20, 2007 Tax notes: Payment of MCIT
WITH the issuance of Revenue Regulations (RR) 12-2007, the computation and the payment of minimum corporate income tax (MCIT) imposed on domestic and resident foreign corporations shall now apply at the time of filing the quarterly corporate income tax.
In the computation of the tax due for the taxable quarter, if the computed quarterly MCIT is higher than the quarterly normal income tax, the tax due to be paid for such taxable quarter at the time of filing the quarterly corporate income tax return (ITR) shall be the MCIT which is two percent of the gross income as of the end of the taxable quarter.
In the payment of said quarterly MCIT, excess MCIT from the previous taxable year/s shall not be allowed to be credited. Expanded withholding tax, quarterly corporate income tax payments under the normal income tax, and the MCIT paid in the previous taxable quarter/s of the current taxable year are allowed to be applied against the quarterly MCIT due.
RR 12-2007 also states that if apart from deriving income from its core business activities there are other items of gross income realized or earned by the taxpayer during the taxable period which are subject to the normal corporate income tax, the same items must be included as part of the taxpayer’s gross income for computing MCIT.
The payment of quarterly MCIT shall take effect beginning on the ITR for the taxable quarter ending September 2007 which is due for filing on or before Nov. 29.
The Bureau of Internal Revenue (BIR) has already issued a revised version of the quarterly ITR (BIR Form 1702Q) in order to provide a space for the computation of the quarterly MCIT. (Source: Punongbayan & Araullo)
