I'm Giancarlo Enrico S. Pozon, a Wushu instructor, investor and Barrister... That's right, Barrister; I graduated from law school and took the Bar Exams, now I'm waiting for the results. I created this blog to make Philippine Law easy to understand for the average person. It's all about free legal advice. There are many law blogs. But the problem is that many of them are written for lawyers and law students. They use words that can't be understood by ordinary people.
Many lawyers, judges and law students consider themselves as superior to most human beings because of their knowledge of the law. It bothers me since the law is supposed to serve society. Since the law is meant to serve society as a whole, it is important that is must be understood by everybody.
This does not mean that we should all become lawyers. It means that although law is a highly specialized profession, the first duty of everybody in this profession is to make the law understandable to all; that's why all these articles are free legal advice.
Like I said, this blog is about law -but it's for the ordinary people, not the lawyers. It's for the ordinary folk so they will know what is good and bad for them, and that making them aware of the law will help us all improve society as a whole. This is free legal advice for everybody!
Section 27(A) of the NIRC offers a tax privilege to local corporations as well as foreign ones that are based in this country if they are capable to meet certain requirements. Rather than the usual 32% rate on net income, a corporation will be taxed at 15% of its gross income if the president gives it the option -but only if recommended by the Secretary of Finance. This is known as the Gross Income Tax Method, or Gross Income Tax Option. The requirements, however, make it very difficult. After looking at the requirements, go over all the other taxes corporations are supposed to pay, then it becomes next to impossible:
1.) The Tax Ratio Effort must be at least 20% of the Gross National Product
2.) The ratio of income tax collection to total taxes revenues must be at least 40%
3.) The VAT tax effort must be 4% of the GNP
4.) The Consolidated Public Sector Financial Position ratio to GNP must be 9%
5.) A maximum ratio of 55% cost of sales to gross sales or receipts from all sources
Once granted, the privilege is irrevocable for 3 years if the corporation chooses to use the privilege.
Looks difficult until you think of what to do in order to get that privilege -and then it looks almost impossible.
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