Title II — TAX ON INCOME
cost, insurance premiums and other costs incurred to bring the raw
materials to the factory or warehouse.
In the case of taxpayers engaged in the sale of service, ‘gross income’
means gross receipts less sales returns, allowances, discounts and
cost of services. ‘Cost of services’ shall mean all direct costs and
expenses necessarily incurred to provide the services required by the
customers and clients including (A) salaries and employee benefits of
personnel, consultants and specialists directly rendering the service
and (B) cost of facilities directly utilized in providing the service such
as depreciation or rental of equipment used and cost of supplies:
Provided, however, That in the case of banks, ‘cost of services’ shall
include interest expense.
SEC. 28. Rates of Income Tax on Foreign Corporations. —
(A)
Tax on Resident Foreign Corporations. —
(1) In General. — Except as otherwise provided in this Code, a
corporation organized, authorized, or existing under the laws of any
foreign country, engaged in trade or business within the Philippines,
shall be subject to an income tax equivalent to thirty-five percent
(35%) of the taxable income derived in the preceding taxable year
from all sources within the Philippines: Provided, That effective
January 1, 2009, the rate of income tax shall be thirty percent (30%).
In the case of corporations adopting the fiscal- year accounting
period, the taxable income shall be computed without regard to the
specific date when sales, purchases and other transactions occur.
Their income and expenses for the fiscal year shall be deemed to
have been earned and spent equally for each month of the period.
The corporate income tax rate shall be applied on the amount
computed by multiplying the number of months covered by the new
rate within the fiscal year by the taxable income of the corporation
for the period, divided by twelve.
Provided, however, That a resident foreign corporation shall be
granted the option to be taxed at fifteen percent (15%) on gross
income under the same conditions, as provided in Section 27(A).
(2) Minimum Corporate Income Tax on Resident Foreign Corporations.
— A minimum corporate income tax of two percent (2%) of gross
income, as prescribed under Section 27(E) of this Code, shall
be imposed, under the same conditions, on a resident foreign
corporation taxable under paragraph (1) of this Subsection.
National Internal Revenue Code of 1997 (as amended by the TRAIN Law, RAs 11256, 11346 and 11467)
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