Tax Alert No. 17 [Revenue Memorandum Circular (RMC) No. 36-2024 dated 11 March 2024]

15 Mar 2024

Clarification on the Manner of Computing the Minimum Corporate Income Tax (“MCIT”) for Taxable Year 2023

Please be informed that RMC No. 36-2024 has been issued on 11 March 2024 to clarify the manner of computing the MCIT for taxable year 2023.

The Corporate Recovery and Tax Incentives for Enterprises (“CREATE”) Act prescribed the one percent (1%) MCIT from 1 July 2020 to 30 June 2023. Effectively starting 1 July 2023, the MCIT rate shall return to its old rate of two percent (2%) based on gross income of corporate taxpayers.

In computing the MCIT, the gross income shall be divided by 12 months to get the average monthly gross income then subsequently apply the rate of 1% for the period from 1 January 2023 to 30 June 2023 and 2% for the period from 1 July 2023 to 31 December 2023.

Below are the following rates corresponding to the taxable period for ease of computation:

Annual Accounting Period	MCIT Rate	Annual Accounting Period	MCIT Rate
FY 7-31-23	1.08%	FY 1-31-24	1.58%
FY 8-31-23	1.17%	FY 2-28-24	1.67%
FY 9-30-23	1.25%	FY 3-31-24	1.75%
FY 10-31-23	1.33%	FY 4-30-24	1.83%
FY 11-30-23	1.42%	FY 5-31-24	1.92%
CY 12-31-23	1.50%	FY 6-30-24	2.00%