INCOME TAX ON CORPORATIONS
Under Sec. 2 of the Corporation Code (Batas Pambansa Bilang 68), a “corporation” is an artificial being created by operation of law, having the right of succession
and the powers, attributes and properties expressly authorized by law or incident to its existence.
However, for income tax purposes, the term “corporation” shall include:
1. Partnerships, no matter how created or organized,
2. Joint stock companies;
3. Joint accounts (cuentas en participacion);
4. Associations, or
5. Insurance companies,
EXCEPT:
1.
2.
General Professional Partnership; and
Joint Venture or Consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal and other energy
operations pursuant to an operating or consortium agreement under a service contract with the government. (Sec. 22([B] of the Tax Code)
Partnership
General Professional
Partnerships
Joint Venture
Joint Stock
Companies
Joint Accounts
Associations
A.
1.
2.
Under the Civil Code, a partnership is one created when two or more persons contribute money, property or
industry to a common fund with the intention of dividing the profit among themselves. (Art. 1767)
Partnerships formed by persons for sole purpose of exercising their common profession, no part of the
income of which is derived from engaging in any trade or business.
A commercial undertaking by two or more persons, differing from a partnership in that it relates to the
disposition of a single lot of goods, or the completion of a single project.
Constituted when a group of individuals, acting jointly, establish and operate a business enterprise
under an artificial name, with an invested capital divided into transferrable shares, an elected board of
directors and other corporate characteristics, BUT operating without formal governmental authority
Constituted when one interests himself in the business of another by contributing capital thereto, and sharing
in the profits or losses in the proportion agreed upon. They are not subject to any formality and may be
privately contracted orally or in writing.
Includes all organizations which have substantially the salient features of a corporation to be taxable as such.
CLASSIFICATION OF CORPORATIONS
Domestic Corporation – is a corporation created and organized under the law of the Philippines;
Foreign Corporations – are those which are created and organized under foreign laws:
a. Resident – having a permanent establishment/branch in the Philippines, acquiring residency for tax purposes;
b. Non-resident – no permanent establishment in the Philippines; not regularly engaged in trade or business in the Philippines.
Corporation
Domestic Corporation
Resident Foreign Corporation
Non-resident Foreign Corporation
B.
1.
2.
3.
Tax Base
Taxable Income from sources within and outside the Philippines
Taxable Income from sources within the Philippines
GROSS Sales/Receipts from sources within the Philippines
TAX BASE
Tax base for Regular Corporate Income Tax purposes is taxable income which is the gross income less allowable deductions;
For Minimum Corporate Income Tax, the tax base is the gross income; “Gross Income”, as contemplated in the tax code, is Net Sales or Receipts (Gross
sales or receipts less sales returns, discounts and allowances) less any Cost of Sales or Cost of Services.
For Non-resident Foreign Corporations, the tax base is the Gross Sales/Receipts which generally connotes Sales/Receipts less Discounts, Returns and
Allowances, or Net Sales/Receipts.
For reference:
Gross Sales/Receipts
Less: Discounts and Returns
Net Sales
Less: Cost of Goods Sold
Gross Income
Less: Itemized Deductions/Optional Standard Deduction
Taxable Income
xxx
(xxx)
xxx
(xxx)
xxx
(xxx)
xxx
4.
Gross Income excludes items which are subject to Capital Gains Tax or Final Tax and those which are Exempt.
C.
TAX RATES
1.
Income Tax rate (or the Regular Corporate Income Tax (RCIT) or Normal Corporate Income Tax or Normal Income Tax) for all corporations is 30%,
notwithstanding if they are domestic or foreign.
2.
Capital Gains Tax rates for:
Domestic Corporations
Transaction
Sale of shares of stock of a
domestic corporation not listed
and traded though a local stock
Rate
15%*
Tax Base
On the net capital gain
exchange, held as capital asset
(Sec. 27[D][2])
Sale of LAND and/or BUILDING in
the Philippines held as capital
asset (Sec. 27[D][5])
6%
On the gross selling price, or the
current fair market value at the
time of sale, whichever is higher
Note that for corporations, only sale of land and/or building held as capital assets shall be subject to the 6% CGT unlike an individual taxpayer who is liable
for the 6% CGT on sale of “real property”. Accordingly, a corporation’s sale of machineries, although it may be classified as real property, held as a capital asset
is not subject to the 6% CGT but to ordinary income tax.
*the rate prior to the effectivity of the TRAIN for sale of shares of stock of a domestic corporation not listed and traded through a local stock exchange, held as
capital asset is that applicable to Foreign Corporations, the rates of which were overlooked and thus remained unchanged.
Foreign Corporations (resident or non-resident)
Transaction
Sale of shares of stock
of a domestic
corporation not listed
and traded though a
local stock exchange,
held as capital asset
3.
Rate
5%
10%
Tax Base
On the net capital gain:
Not over P100,000
On any amount in excess of
P100,000
(Sec. 28[A][7][c] and
[B][5][c])
Final Withholding Tax/Final Tax rates for:
Domestic Corporations
Rate
20%
15%
Exempt
20% FWT or
30% RCIT
Income
Interest from any currency bank deposit; Yield or other monetary
benefit from deposit substitutes and from trust funds and similar
arrangements and Royalties. (Sec. 27[D][1] and Sec. 28[A][7][a])
Interests from depository banks under the Foreign Currency Deposit
System. (Sec. 27[D][3] and Sec. 28[A][7][b])
Cash and/or property dividends
Interest Income from LONG TERM deposit or investment*
Resident Foreign Corporations: the rates applicable to resident foreign corporations are the same except for interests from depository banks under the
Foreign Currency Deposit System which is subject still to the old rate of 7.5% since the TRAIN package 1 did not amend the provisions pertaining to RFCs.
*Interest from Long-term deposits: Note that interest income from long-term deposit or investment earned by individuals is exempt, subject to tax only in
case of pre-termination. Under Revenue Regulations No. 14-2012, such exemption is limited only to individuals. Accordingly, interest earned by corporations
from long-term deposits is subject to the following tax:
a. 20% FWT – for interest income from long-term deposits issued by banks or investment certificates considered as deposit substitutes;
b. 30% RCIT – for interest earned from long-term deposits NOT issued by banks or investment certificates NOT considered as deposit substitutes. (Q&A5 of
RMC No. 77-2012)
Deposit Substitute: following the 19-lender rule (or the 20 or more lender rule) and as defined under Sec. 22(X) of the Tax Code, a deposit substitute shall
mean an alternative form of obtaining funds from the public (“public” means borrowing from 20 or more individual or corporate lenders at any one
time), other than deposits, through the issuance, endorsement, or acceptance of debt instruments for the borrower’s own account, for the purpose of relending
or purchasing of receivables and other obligations, or financing their own needs or the needs of their agent or dealer.
Government issued securities are not automatically deposit substitutes: under Sec. 2(1) of RR No. 14-2012, the BIR provided that the instruments
issued by the Government, including the Bureau of Treasury (BTr), is considered as a “deposit substitute” regardless of the number of lenders at the time of
origination if such debt instruments and securities are to be traded or exchanged in secondary market.
However, in Banco de Oro, et. al. vs. Republic of the Philippines, the SC held that for purposes of determining whether an instrument constitutes a deposit
substitute, it must comply with the 19-lender rule or the 20 or more lender rule; and for purposes of determining the "20 or more lenders", the phrase "at any
one time" would mean every transaction executed in the primary or secondary market in connection with the purchase or sale of securities, not just the original
issuance.
As such, BIR Ruling No. 370-2011 which enunciated the rule that “all treasury bonds . . . regardless of the number of purchasers/lenders at the time of
origination/issuance are considered deposit substitutes” was declared void for it disregarded the 20 or more lender rule under the Tax Code. It also created a
distinction for government debt instruments as against those issued by private corporations when there was none in the law. (GR No. 198756, January 13,
2015)
Non-Resident Foreign Corporation (Sec. 28[B][1] and [5][a,b]):
Rate
30%
20%
Income
All sources of income: interests, dividends, rents, royalties, salaries,
premiums, annuities, emoluments or other fixed or determinable annual,
periodic or casual gains, profits and income, and capital gains, except
capital gains subject to capital gains tax and those provided below
Interest on Foreign Loans
15%
Exempt
Intercorporate Dividends provided that the country where the Company is
domiciled provides for a 15% credit on Philippine taxes deemed paid*
Interests from depository banks under the Foreign Currency Deposit
System
*TAX SPARING RULE: Tax on dividend income is entitled to a reduction up to 15 percent if the country of residence of a corporate stockholder:
1. Allows a sparing credit of 15-percent tax deemed to have been paid in the Philippines against the tax due on the dividends; or
2. Does not impose any tax on the dividends. (Interpublic Group of Companies, Inc. vs. Commissioner of Internal Revenue, CTA Case No. 7796, Feb. 21, 2011,
citing Commissioner of Internal Revenue vs. Wander Philippines, Inc.)
SUMMARY OF TAXABILITY OF NON-RESIDENT FOREIGN CORPORATION: From the above, it will be noted that the income earned by a non-resident
foreign corporation earned from the Philippines is GENERALLY subject to 30% Final Tax, EXCEPT:
1. Interest on Foreign Loans – which is subject to 20% Final Tax;
2. Dividends – when the tax sparing rule applies;
3. Income (whatever type) from Foreign Currency Deposit Units of local banks - exempt;
4. Income covered by a Tax Treaty providing for exemption or a lower rate.
D.
MINIMUM CORPORATE INCOME TAX (MCIT) (Sec. 27[E])
The MCIT is 2% of Gross Income, which is Net Sales or Revenue (Gross sales or revenue less discounts, returns or allowances) less Cost of Sales or Services;
Cost of Sales or Services are those directly incurred in bringing about the revenue or sales.
1.
For a trading or merchandising concern, ‘cost of goods sold’ shall include the invoice cost of the goods sold, plus import duties, freight in transporting
the goods to the place where the goods are actually sold, including insurance while the goods are in transit.
2.
For a manufacturing concern, ‘cost of goods manufactured and sold’ shall include all costs of production of finished goods, such as raw materials used,
direct labor and manufacturing overhead, freight cost, insurance premiums and other costs incurred to bring the raw materials to the factory or warehouse.
3.
In the case of taxpayers engaged in the sale of service, ‘gross income’ means gross receipts less sales returns, allowances and discounts less ‘cost of
services’ which includes:
a. Salaries and employee benefits of personnel, consultants and specialists directly rendering the service; and
b. Cost of facilities utilized in providing the service such as depreciation or rental of equipment used; and
c. Cost of supplies.
Note, however, that specific industries have different components of the Cost of Sales or Services, as provided under RMC No. 4-2003. E.g., interest expense is
not considered part of cost of services, except for Banks and other Financial Institutions.
Other income items: all other income shall be included in the computation of the Gross Income subject to MCIT, except those exempt and those subject to
final tax.
So, a manufacturing entity earning rental income, is required to include the rental income in computing the MCIT even if it is not arisng from its main line of
business.
When applicable: A company is liable for MCIT starting the 4th year immediately following the year in which it commenced its operations. Meaning,
if the Company started operating in 2016 (regardless of the month), it will be liable for MCIT (provided it is higher than RCIT) starting 2020, which is the 4 th
year from 2017 (the year following the year in which it commenced operations).
The MCIT does not apply to non-resident foreign corporations. However, Resident Foreign Corporations are also liable for MCIT under Sec. 28(A)(2) of
the Tax Code.
When due: The tax due shall be equivalent to the MCIT whenever it is higher than RCIT.
Accordingly, its computation is done quarterly, same as RCIT, on a cumulative basis (i.e., the income and expenses from the first quarter are included in the
preparation of the 2nd quarter return and so on). Thus, if in a taxable quarter, the MCIT is higher than the RCIT, the former shall be the amount due for payment,
less any available tax credits.
EXCESS MCIT CARRY-OVER (Sec. 27[E][2]): Any excess of the MCIT over the RCIT shall be carried forward and credited against normal tax (RCIT) for the
three (3) immediately succeeding taxable years.
In the period it is to be credited, the RCIT should be higher than the MCIT. Thus, if in the three succeeding taxable years, the MCIT is higher than the RCIT,
the excess MCIT carry-over would expire and would no longer be creditable beyond that period.
Accounting entry: the accounting entry for excess MCIT carry-over would be:
Provision for income tax/Income Tax Expense
Deferred Charge – MCIT/MCIT Carry-over
Income Tax Payable/Cash
XXX
XXX
XXX
The provision for income tax or the income tax expense would be equivalent to the normal tax (RCIT), while the Income Tax Payable/Cash would be equivalent
to the MCIT. The difference is treated as an asset which may be creditable against the RCIT in the succeeding 3 years where RCIT is higher.
FORMAT OF COMPUTATION:
Sales/Revenues/Receipts/Fees
Less Cost of sales/services
Gross Income from Operations
XXX
(XXX)
XXX
Add: Non-operating and taxable other income
Total Gross Income (A)
Less: Itemized Deductions/Optional Standard Deduction
Taxable Income (B)
XXX
XXX
(XXX)
XXX
Regular Corporate Income Tax (RCIT) 30% of Taxable Income (B)
Minimum Corporate Income Tax (MCIT) 2% of Total Gross Income (A)
Tax Due (whichever is higher)
If RCIT is higher: less Unexpired excess of prior year’s MCIT
Balance
Less: Tax credits
Prior year’s excess tax credits other than MCIT
Tax payments for the first three quarters
Creditable tax withheld for the first three quarters
Creditable tax withheld for the fourth quarter
Foreign tax credits, if applicable
Tax paid in return previously filed, if this is an amended return
Tax Payable/(Overpayment)
XXX
XXX
XXX
(XXX)
XXX
XXX
XXX
XXX
XXX
XXX
XXX
XXX
(XXX)
XXX
RELIEF FROM MCIT (Sec. 27[E][3], Tax Code):
The Secretary of Finance is authorized to suspend the imposition of the MCIT on any corporation which suffers losses on account of;
1. Prolonged labor disputes: losses arising from a strike staged by the employees which lasted more than 6 months within a taxable period and which has
caused the temporary shutdown of business operations.
2. Because of force majeure: means a cause due to irresistible force by “act of God” like lightning, earthquake, storm, flood and the like. This term shall also
include armed conflicts like war or insurgency.
3. Legitimate business reverses: include substantial losses due to fire, robbery, theft or embezzlement, or other economic reasons as determined by the
Secretary of Finance.
CORPORATIONS NOT SUBJECT TO MCIT:
1. Propriety educational institutions subject to the tax of 10%;
2. Non-profit hospital subject to 10% tax;
3. Depository banks under the expanded foreign currency deposit system (Foreign Currency Deposit Units [FCDUs]) for offshore income exempt from income
tax and onshore income subject to 10% final tax;
4. Offshore banking units similarly taxed as FCDUs;
5. International carriers subject to 2.5% tax on Gross Philippine Billings;
6. ROHQs subject to 10% tax;
7. PEZA registered entities’ income subject to ITH or the 5% preferential GIT;
8. BOI registered entities for income subject to ITH.
Note that the MCIT is due only if it is higher than the 30% RCIT and all the above entities are not subject to the 30% RCIT. However, taxable income of FCDUs,
OBUs, PEZA- and BOI-registered entities, which are not covered by the special rates (subject to 30% RCIT), are likewise subject to the MCIT, whenever
applicable.
E.
IMPROPERLY ACCUMULATED EARNINGS TAX (Sec. 29)
The Improperly Accumulated Earnings Tax (IAET) is 10% of the Improperly Accumulated Earnings, the latter to be computed in accordance with Sec. 29(D), as
follows:
Taxable Income
Add
Income Exempt from Tax
Income excluded from gross income
Income subject to Final Tax
NOLCO deducted
Less
Income Tax Paid/Payable during the year
Dividends actually or constructively paid
Amount reserved for the reasonable needs of the business
Improperly Accumulated Earnings
IAET (10%)
XXX
XXX
XXX
XXX
XXX
(XXX)
(XXX)
(XXX)
XXX
XXX
“Reasonable needs of the business” – this term refers to the immediate needs of the business, including reasonably anticipated needs which would justify
accumulation of earnings, such as:
a. Those reserved for expansion projects or programs requiring substantial capital expenditures;
b. Those reserved for building, plants or equipment acquisition;
c. In compliance with loan covenants or pre-existing obligation established under a legitimate business arrangement;
d. Those required by law or applicable regulations to be retained by the corporation or in respect of which there is a legal prohibition against its distribution;
e. In case of subsidiaries of foreign corporations, those intended or reserved for investments within the Philippines.
Presumption of improper accumulation: there are three cases, when, in the absence of proof to the contrary, a corporation would be considered improperly
accumulating profits, that is, formed for the purpose of preventing the imposition of income tax on its shareholders, to wit:
A Holding Company
An Investment Company
A corporation that practically have no activities except holding property,
and collecting the income therefrom or investing therein.
A corporation whose activities further includes, or consists substantially
of, buying and selling stocks, securities, real estate, or other investment
yield but also from profits upon market fluctuations.
Prima facie improper accumulation of profits: Under the Corporation Code, a corporation can retain profits not exceeding 100% of its paid-up capital.
As such, retained earnings amounting to more than 100% of the paid-up capital is prima facie evidence of improper accumulation.
Exempt from IAET: the following are exempt from IAET (Sec. 29[B][2]):
a.
b.
c.
d.
e.
f.
Publicly-owned corporations
Banks and other non-bank financial intermediaries
Insurance companies
Those exempt from income tax (i.e., Non-taxable partnerships, GPPs, Non-taxable joint ventures)
PEZA-registered entities.
Partnerships.
F.
1.
2.
3.
4.
5.
OPTIONAL CORPORATE INCOME TAX (GROSS INCOME TAX)
Upon recommendation of the Secretary of Finance, the President, effective January 1, 2000, may allow corporation to be subjected to optional corporation
tax.
The Optional Corporate Income Tax shall be 15% of the gross income;
This option is available to both domestic corporation and resident foreign corporation;
The option to be taxed based on gross income shall be available only to firms whose ratio of cost sales to gross sales does not exceed 55%;
Election of the gross income tax shall be irrevocable for the three consecutive taxable years during which the corporation is qualified.
G.
GOVERNMENT-OWNED OR -CONTROLLED CORPORATIONS
1.
2.
Generally subject to 30% regular corporate income tax;
The following are tax-exempt government owned or controlled corporations under Sec. 27(C) of the Tax Code:
a. Government Service Insurance System (GSIS)
b. Social Security System (SSS)
c. Philippine Health Insurance Corporation (PHIC); and
d. Local Water Districts
PAGCOR and PCSO: are now subject to the 30% RCIT and are no longer considered as exempt GOCCs.
H.
1.
SPECIAL CORPORATIONS
Special Domestic Corporations
Special Domestic Corporation
Proprietary Educational Institutions
and Non-profit Hospitals (Sec. 27[B]
of the Tax Code)
Non-stock, non-profit educational
institutions
Government-owned or controlled
corporations, agencies or
instrumentalities (Sec. 27(C) of the
Tax Code)
Tax Base
Net Income
None
Net Income
Tax Rate
Generally, 10%;
30% - if income from unrelated
business* exceeds 50%
Exempt from income taxes**(Sec.
4[3], Art. XIV of the 1987 Constitution)
30%
Same as those imposed upon
corporation or association engaged in
similar business, or activity.***
*“Unrelated trade, business or other activity” are those which are not substantially related to the exercise or performance of the school or hospital’s primary
purpose or function. Thus, whenever such income is more than 50% of the total income of the proprietary educational institution or non-profit hospital, all its
income becomes subject to 30% RCIT.
Deduction: for private educational institutions, capital outlays, or expenditures made for expansion of school facilities may either be:
a.
b.
Deducted as expenditure; or
Depreciated over estimated life.
Note that for other corporations, the capital outlays and expenditures may only be treated as outright expense if, for accounting purposes, they are determined
as repairs and maintenance; while it may be treated as capitalizable and forms part of the cost of the asset if considered as such for accounting purposes.
**This exemption extends not only to the revenues and income of assets derived from strictly school operations like tuition and miscellaneous fees but also to
incidental income derived from canteen operations, bookstores and dormitory facilities which are owned and operated by the school itself and are located inside
the campus. (DECS Order No. 137-87)
Thus, canteens operated by mere concessionaires even though located inside the campus, are taxable.
2.
Special Resident Foreign Corporations
Special RFC
International carrier
(Sec. 28[A][3])
Offshore banking units
(OBU) (Sec. 28[A][4])
Tax Base
Tax Rate
2 1/2%
Income from foreign currency transactions with non-residents, Offshore Banking Units
(OBUs) in the Philippines, local commercial banking units including Philippine branches
of foreign banks under the foreign currency deposit system
Exempt from all
taxes
Gross Philippine Billings*
Interest income from foreign currency loans granted to residents other than other
OBUs or local commercial banks under the foreign currency deposit system.
Income other than interest from loans
10% final tax
30% RCIT
Income of non-resident from OBUs
Branch Profit Remittance
Tax** (Sec. 28[A][5])
Regional or area
headquarters of
multinationals*** (Sec.
28[A][6][a])
Regional operating
headquarters of
multinationals**** (Sec.
28[A][6][b])
Exempt
Total profits applied or earmarked for remittance without deduction for the tax
component
15%
Exempt from tax
Taxable Income
10%
*Gross Philippine Billings for:
a. International air carrier refers to the amount of gross revenue derived from carriage of persons, excess baggage, cargo, or mail originating from the
Philippines in a continuous and uninterrupted flight, irrespective of the place of sale or issue and the place of payment of the ticket or passage document.
(Sec. 28[A][3][a]) Provided, that tickets revalidated, exchanged and/or indorsed to another international airline form part of the Gross Philippine Billings if
the passenger boards a plane in a port or point in the Philippines. Provided further, that for a flight which originates from the Philippines, but transhipment
of passenger takes place at any part outside the Philippines or another airline, only the aliquot portion of the cost of the ticket corresponding to the leg
flown from the Philippines to the point of transhipment shall form part of the Gross Philippine Billings. (as amended by RA No. 10378)
b. International shipping means gross revenue whether for passenger, cargo or mail originating from the Philippines up to final destination, regardless of
the place of sale or payment of the passage or freight documents. (Sec. 28[A][3][b])
Exemption under reciprocity: international carriers doing business in the Philippines ma avail of a preferential rate or exemption from the tax herein imposed on
the basis of applicable tax treaty or international agreement to which the Philippines is a signatory or on the basis of reciprocity such that an international carrier,
whose home country grants income tax exemption to Philippine carriers shall likewise be exempt from the tax imposed under this provision. (as amended by RA
No. 10378)
**PEZA-registered entities are exempt from the imposition of the Branch Profits Remittance Tax.
***Regional or area headquarters is a branch in the Philippines by a multinational company and which headquarters do not earn or derive income from
Philippines and which act as supervisory, communications and coordinating center for their affiliates, subsidiaries or branches in the Asia Pacific Region and
other foreign market.
****Regional operating headquarters are those branches established in the Philippines by multinational companies to offer services to its affiliates outside
the Philippines; they are engaged in different services such as general administration and planning, business planning and coordination, marketing control and
sales promotion, etc.
3.
Special Non-Resident Foreign Corporation (Sec. 28[B][2, 3 and 4])
Special NRFC
Non-resident cinematographic film
owner, lessor or distributor
Non-resident owner or lessor of aircraft,
machineries and other equipment
Non-resident owner or lessor of vessels
chartered by Philippine nationals
Tax Base
Gross income from Philippine sources
Tax Rate
25%
Gross rentals or fees derived within the Philippines
7½%
Gross rentals, lease or charter fees from leases or charters to Filipino
citizens or corporations, as approved by Maritime Industry Authority
4½%
TAX EXEMPT CORPORATIONS
Sec.
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
30 of the Tax Code enumerates the following corporations which are exempt from the Tax on Corporations:
Labor, Agriculture, or Horticultural Organization not organized principally for profit.
Mutual Savings Banks and Cooperative Banks
Fraternal Beneficiary Society, Order or Association
Cemetery Companies owned and operated exclusively for the benefit of its members;
Religious, Charitable, Scientific, Athletic or Cultural Corporations
Business League, Chamber of Commerce, or Board of Trade
Civic League
Non-Stock, Non-Profit Educational Institutions
Government Educational Institution
Mutual Fire Insurance Companies and Like Organizations
Farmers, Fruit Growers’ or Like Associations
EXCEPTION: income from whatever kind and character of the foregoing corporations from any of their properties, real or personal, or from any of their activities
conducted for profit regardless of the disposition made of such income, shall be subject to tax.
An institution under Section 30(E) or (H) does not lose its tax exemption if it earns income from its for-profit activities. Such income from for-profit activities,
under the last paragraph of Section 30, is merely subject to income tax, previously at the ordinary corporate rate but now at the preferential 10% rate pursuant
to Section 27(B). (Commissioner of Internal Revenue vs. St. Luke’s Medical Center, Inc., GR No. 203514, Feb. 13, 2017, citing same titled case, GR Nos. 195909
and 195960, September 26, 2012)