Corporate income tax services in the Philippines
Get your company’s quarterly and annual income tax returns prepared and filed with the Bureau of Internal Revenue. Our Manila team reviews your accounts, calculates the tax due, and reconciles previous payments and tax credits before filing, for foreign-owned Philippine companies and branches.
Corporate income tax rates in the Philippines
The standard corporate income tax rate is 25 percent of net taxable income. A reduced 20 percent rate applies to qualifying domestic corporations that meet both the income and the asset tests.
| Company or tax regime | Rate | Main condition |
|---|---|---|
| Domestic corporation under the regular regime | 25% | Applies where the company does not qualify for the reduced rate |
| Qualifying smaller domestic corporation | 20% | Net taxable income of PHP 5 million or less and total assets of PHP 100 million or less, excluding the land under the office, plant and equipment |
| Resident foreign corporation, including a Philippine branch | 25% | Applies to Philippine-source net taxable income |
| Branch profit remittance tax | 15% | On profits a branch sends to its head office; a tax treaty can reduce it |
| Registered project under the enhanced deductions regime | 20% | Applies to taxable income from the approved registered project |
| Minimum corporate income tax (MCIT) | 2% of gross income | Applies to covered corporations once eligible, when it exceeds the regular income tax |
A foreign-owned company incorporated in the Philippines can qualify for the reduced rate: foreign ownership alone does not disqualify it. A Philippine branch of a foreign company does not qualify, even when its income and assets are below the limits.
Does your company qualify for the 20% rate?
- Net taxable income does not exceed PHP 5 million.
- Total assets do not exceed PHP 100 million, excluding the land on which the company’s office, plant, and equipment are situated.
Both conditions must be met. A domestic corporation with PHP 4 million in net taxable income and PHP 60 million in qualifying assets, for example, would calculate regular corporate income tax of PHP 800,000. Previous payments, tax credits, and any minimum tax are then taken into account to work out the balance payable.
What Emerhub handles for your company
Your income tax return has to agree with your accounting records, previous filings, and supporting documents. Our Manila team, which has filed for foreign-owned companies for over a decade, brings those records together, flags the gaps, and prepares the computation and return for your review.
| Service | What we handle |
|---|---|
| Quarterly income tax returns | Calculate the tax due and prepare Form 1702Q for the first three quarters |
| Annual income tax return | Prepare the year-end computation and the right Form 1702 return |
| Deductions and adjustments | Review business expenses and reconcile accounting profit with taxable income |
| Tax credits and previous payments | Reconcile quarterly payments, withholding tax certificates, and carry-over credits |
| Financial statements and audit coordination | Prepare supporting schedules and work with your independent auditor where an audit is required |
| Filing and supporting documents | Submit through the required BIR channel and send you the filing confirmation and final return |
If your bookkeeping needs attention too, our accounting services in the Philippines can cover the monthly records behind your returns. We agree the scope at the start: bookkeeping, year-end preparation, audit coordination, or filing only.
How we calculate your tax payable
Accounting profit and taxable income are not always the same. Some expenses need tax adjustments, and some income is exempt or taxed separately. We review the accounts and supporting schedules to establish:
- Revenue and the cost of sales or services.
- Allowable deductions, and expenses that need adjusting.
- Income subject to final tax or a separate return.
- Loss carry-overs and minimum-tax credits available.
- Quarterly income tax payments and creditable withholding taxes.
- The tax still payable, or the excess credits.
For eligible companies we also compare itemized deductions with the optional standard deduction, which allows up to 40 percent of gross income. It does not remove the obligation to keep proper books and records. Before filing, we walk you through the computation and the payment due, and you get the filed return and computation for your records.
Companies with registered tax incentives
An income tax holiday, the special corporate income tax, or enhanced deductions change how a registered project is taxed, and income outside the project may be treated differently. We review the registration documents and separate the income and expenses before preparing the return. Our guide to export enterprises in the Philippines covers the main incentive options and who qualifies.
Minimum tax, losses, and income taxed separately
Minimum corporate income tax: a worked example
MCIT starts in the fourth taxable year after the year the company began operations, and it can apply even in a year with a net loss. Take a company in its fifth year with gross income of PHP 30 million, deductions of PHP 29.5 million, and total assets of PHP 150 million, which puts it on the 25 percent rate:
| Computation | Amount |
|---|---|
| Regular tax: 25% × PHP 500,000 net taxable income | PHP 125,000 |
| MCIT: 2% × PHP 30,000,000 gross income | PHP 600,000 |
| Tax payable (the higher of the two) | PHP 600,000 |
| Excess MCIT, creditable against regular tax over the next three years | PHP 475,000 |
Carrying losses forward (NOLCO)
A net operating loss can be deducted in the next three consecutive taxable years, as long as at least 75 percent of the shares stay with the same holders. A company that uses the optional standard deduction cannot deduct carried-over losses that year, because the deduction replaces itemized deductions, but the year still counts toward the three.
Income taxed outside the annual return
| Income | Tax |
|---|---|
| Interest on peso bank deposits | 20% final tax |
| Interest on foreign currency deposits | 15% final tax |
| Royalties | 20% final tax |
| Dividends from domestic corporations | Exempt |
| Sale of unlisted shares | 15% on the net gain |
| Sale of land or buildings held as capital assets | 6% of the higher of the selling price or market value |
The 10 percent improperly accumulated earnings tax was repealed by the CREATE Act from 2021, so it no longer applies.
Quarterly and annual filing deadlines
Corporate income tax is reported during the year and reconciled in the annual return. The annual deadline follows your company’s registered financial year-end.
| Filing | Standard deadline |
|---|---|
| First-, second-, and third-quarter returns (Form 1702Q) | Within 60 days after each quarter ends |
| Annual return, 31 December year-end | 15 April of the following year |
| Annual return, any other year-end | The 15th day of the fourth month after year-end |
A company with a 30 June year-end, for example, files its annual return by 15 October. We also track BIR advisories and the deadlines for supporting attachments, which can differ from the return itself. At the start, we agree when records, approvals, and payment funding are needed, so your team has time to fill any gaps before the deadline.
What we need to get started
We start from your company’s registration details, accounting records, and previous filings. If another accountant has handled the books or quarterly returns, we review those records as part of the handover. The first documents usually include:
- BIR Certificate of Registration and the registered financial year-end.
- Latest trial balance, general ledger, and financial statements.
- Sales, expense, payroll, and fixed-asset schedules.
- Previous quarterly and annual income tax returns, with payment confirmations.
- Creditable withholding tax certificates, including BIR Form 2307.
- Schedules supporting losses, tax credits, or incentive claims.
Some of these support the computation without being filed. Your general ledger, for example, is not a standard attachment to every annual return.
If your books are not up to date
You do not need finished accounts before contacting us. Send the latest records you have and tell us which periods or filings are outstanding. We assess the work needed to reconcile the accounts, complete missing schedules, and prepare the returns, and agree any bookkeeping cleanup or review of earlier filings separately from the filing scope.
How the filing process works
Review your company and records
We confirm your entity type, tax registration, financial year-end, and incentive status, then review the accounts for missing records or unresolved balances.
Prepare the tax computation
We reconcile accounting profit with taxable income, review deductions, losses, and credits, and compare the regular tax with MCIT where it applies.
Complete the return and schedules
We prepare the right return and explain the tax payable or excess credits. Where audited statements are required, we coordinate with your independent auditor.
File and hand over the records
Once you approve, we file through the required BIR channel, coordinate the payment, and send you the return, filing confirmation, and supporting schedules.
Support beyond the annual return
The annual return is easier when the monthly accounts and quarterly returns are kept up through the year. Our Philippines accounting team can combine corporate income tax with bookkeeping, payroll, and other filings, and our VAT services cover VAT registration and returns. We confirm which obligations apply to your company and plan the work around its filing calendar.
Corporate income tax questions
What company owners ask before they file.
Does a foreign-owned company qualify for the 20% corporate tax rate?
Yes, if it is incorporated in the Philippines and meets both the taxable-income and the asset conditions. A branch of a foreign corporation follows the resident foreign corporation rules instead, so it pays 25 percent.
Does my company need to file if it made a loss?
Yes. The filing obligation continues even with no income or no tax payable. A loss-making company does not become tax-exempt, and it does not automatically qualify to use Form 1702-EX.
When does minimum corporate income tax start?
In the fourth taxable year after the year the company began business operations. If operations began in 2022, the first MCIT year is generally 2026. MCIT is 2 percent of gross income and is payable when it exceeds the regular corporate income tax, so it can apply even in a year with a net loss.
Which annual income tax form does my company use?
Form 1702-RT is for companies subject only to the regular income tax. Form 1702-MX covers mixed, special-rate, or partly exempt income, and Form 1702-EX is for exempt entities with no other taxable income. Quarterly returns use Form 1702Q, and we confirm the right form from your tax status and income.
Do I need audited financial statements?
Under the Tax Code, a company with gross annual sales, earnings, receipts, or output above PHP 3 million must have its books audited by an independent certified public accountant. SEC financial-reporting rules can apply separately. We check both and coordinate the audit where needed; preparing the accounts and auditing them are separate jobs.
What happens if quarterly payments exceed the annual tax?
The company can carry the excess forward, or claim a refund or a tax credit certificate. Choosing the carry-over generally makes that choice irrevocable for the amount concerned, so we review the options with you before filing.
Can you help if we already have an accountant?
Yes. We can work from records prepared by your in-house accountant or another provider and handle the agreed computation and filing. We review the records first and confirm whether more reconciliation is needed, which keeps responsibility for bookkeeping, audit, and filing clear.
Talk to our Philippines tax team
Tell us your company type, financial year-end, and whether your books and previous returns are up to date. Our Manila team will confirm the work needed for your quarterly filings, annual return, and supporting documents.
2 26th St, Taguig
1634 Metro Manila, Philippines