Corporate income tax at 20% or 25% under CREATE.
Corporate tax due
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Regular tax (RCIT)
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MCIT (2%)
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Rate applied
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Reading a corporate tax bill under CREATE
Since the CREATE reforms, a Philippine domestic corporation no longer faces a single flat rate. Instead the tax due is the higher of two separate computations: the regular corporate income tax on net taxable income, and a minimum tax pegged to gross income. This calculator runs both and shows you which one governs, along with whether your company qualifies for the reduced small-corporation rate. It is built for finance staff, founders, and accountants who want a quick sanity check on the year's provision before the formal return is prepared.
The point of comparing two bases is that a profitable, well-run company pays on its actual profit, while a company reporting thin or negative profit still contributes a floor amount tied to its revenue. The tool makes that floor visible rather than letting it surprise you at filing time.
The two rates and who gets the lower one
The regular rate this calculator applies is 25 percent of net taxable income. A reduced 20 percent rate is available to a domestic corporation that clears two tests at once: net taxable income of PHP 5,000,000 or less, and total assets, excluding the land the business sits on, of PHP 100,000,000 or less. Miss either test and you are back to 25 percent. The asset test is why the land carve-out matters: a company on valuable ground can still qualify as small if its operating assets are modest.
A small corporation with PHP 4 million profit
Run the defaults: PHP 4,000,000 net taxable income, PHP 12,000,000 gross income, and PHP 60,000,000 of total assets excluding land. Net is under PHP 5,000,000 and assets are under PHP 100,000,000, so the company qualifies for the 20 percent rate. The steps below use the rates this calculator applies.
| Computation | Amount |
|---|---|
| Qualifies as small? Net under PHP 5M and assets under PHP 100M | Yes, 20% |
| Regular tax: 20% of PHP 4,000,000 | PHP 800,000 |
| Minimum tax: 2% of PHP 12,000,000 gross | PHP 240,000 |
| Tax due, the higher of the two | PHP 800,000 |
Here regular tax of PHP 800,000 comfortably exceeds the PHP 240,000 minimum, so the company pays on its profit and the minimum tax stays dormant. The minimum only bites when margins compress: if this same company earned PHP 12,000,000 gross but reported, say, PHP 800,000 of net income, regular tax at 20 percent would be PHP 160,000, below the PHP 240,000 floor, and the minimum tax would take over. The bars below show how wide the gap is in the default scenario.
The fourth-year rule and other fine print
One detail the calculator notes but cannot enforce from your inputs: the minimum tax does not apply in a company's first three taxable years. It begins from the fourth year of operations, the idea being to give a young business room to find its footing before a revenue-based floor kicks in. So if you are a brand-new corporation, ignore the minimum-tax line for now. There are also rules letting you carry excess minimum tax forward against regular tax in later years, which a quarterly filing handles but this single-year snapshot does not.
A practical caution: gross income for the minimum tax is not the same as total sales. It is sales less cost of sales or cost of services, a narrower figure. If you enter top-line revenue where the rule wants gross income after direct costs, you will overstate the minimum tax. The most common error here is conflating gross sales, gross income, and net taxable income, three different numbers that each drive a different part of the computation.
Does this cover the dividends I take from the company?
No. This tool stops at the corporation's own tax. Dividends you distribute to yourself as a resident individual face a separate final tax in your hands, and salary you draw is taxed as personal compensation. To see the full picture across both layers, pair this with a sole proprietor versus corporation comparison. Confirm the corporate and dividend rates with the BIR.
What if my company enjoys an incentive or a special rate?
Corporations registered with investment promotion agencies, certain exporters, and entities under special regimes can pay rates that differ entirely from the 20 or 25 percent here. This calculator models the standard domestic corporation only. If you hold an incentive certificate, your effective rate is set by that grant, so check your registration terms and the BIR rules rather than relying on this figure.