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!
The minimum corporate income tax (MCIT) was created to prevent tax evasion. BIR will impose a tax of 2% on the gross income of the corporation if the regular corporate income tax is less than that 2%. It takes effect on the fourth (4th) taxable year after the year the corporation started doing business (five years after business started, in other words.) Excesses of the MCIT over the regular income tax are credited to the regular income tax for the next three (3) taxable years.
It is suspended for the following reasons:
1.) A labor dispute lasting longer than six (6) months
2.) Force majeure (war, natural calamities, etc.)
3.) Legitimate business losses caused by fire, robbery, theft, or other economic reasons determined by the Secretary of Finance.
The following domestic corporations are exempt from MCIT
1.) Proprietary educational institutions (educational institutions that aren't non-stock, non-profit)
2.) Non-profit hospitals
3.) Banks under the foreign currency deposit system
4.) Corporations enjoying tax benefits under the Bases Conversion Development Act (RA 7227) and the PEZA Law (RA 7916)
The following resident foreign corporations are exempt:
1.) International air and shipping companies
2.) Offshore Banking Units
3.) Regional operating offices of resident foreign corporations
4.) Resident foreign corporations enjoying tax benefits under RA 7227 and RA 7916
The MCIT won't apply to non-resident foreign corporations
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