23/09/2025
Did you know that the income tax rate for corporation is now 20% to 25%?
Last July 2020, BIR implemented a decreased on corporate tax rates for income payments in giving consideration to all taxpayers due to pandemic. This year February 27, 2025 BIR released RR 007-2025 stating the full implementation and reiteration of the tax rates for domestic and resident foreign corporations.
These regulation promulgated hereby to implement Section 27, 28 and 34 of the tax code specifically on:
1. reduce income tax rates for domestic and resident foreign corporations classified as Registered Business Enterprises (RBEs) under the Enhanced Deduction Regime (EDR) as provided in section 294(C) of the tax code.
2. additional allowable deductions from gross income under section 34(C 8) of the same code.
The income tax rates for domestic corporations:
👉Domestic corporation, in general 25% if:
➡️ net income more than 5M and total assets is more than 100M
👉Domestic corporation 20% if:
➡️net income not exceeding 5M and total assets not exceeding 100M, excluding land on which particular business entities office, plant & equipment are situated during the taxable year.
👉Domestic corporation 20% if:
➡️classified as RBEs under the EDR
The income tax rate for foreign resident corporations:
👉foreign resident corp. in general 25%
👉foreign resident corp. classified as RBE under EDR 20%
The domestic corporations and foreign resident corporation in general effectivity of the tax rate was July 01, 2020, while foreign resident corp. classified as RBE under EDR is effective only last November 28, 2024.
You may browse the attached copy of regulation for the full context.
