Corporate income tax and fiscal incentives or Package 2 of the Corporate Recovery and Tax Incentives for Enterprises or C.R.E.A.T.E. is a new law passed.
C.R.E.A.T.E. bill trims down corporate income tax (CIT) from 30% to 25% for large corporations and 20% for small and medium corporations (given that their net taxable income is below Php 5M and their total assets are below Php 100M).
Period 2019 - Before C.R.E.A.T.E.
Prior to the RMC changes, if you generated a 1702-RT form in JuanTax the only option for Period 2019 and older are:
(Line 40) Applicable Tax Rate is set to 30%
(Line 42) Minimum CIT is set to 2%.
Period 2020 - After C.R.E.A.T.E.
In line with the changes that came with the C.R.E.A.T.E. law, users will now see this banner in JuanTax, giving them an option to choose between using the current tax rates or the C.R.E.A.T.E. law’s new rates.
With 2 simple clicks before filling out the form, changes to taxes with the C.R.E.A.T.E. law will be automatically adjusted and calculated for you based on the transitory rates provided in the regulation.
2. To clarify which Income Tax is applicable to your business under C.R.E.A.T.E. law, a second banner will appear to determine if your total assets exceed PHP 100,000,000.
If total assets exceed PHP 100,000,000, the Income Tax will be set at 25%
If total assets do NOT exceed PHP 100,000,000, the Income Tax will be set at 20%
*27.5% is the cumulative calculation done by JuanTax with Transitory Rates applied.