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CIR v PAL – LAZATIN TOPIC: MCIT
FACTS:
• Respondent fled its Tentative Corporate Income Ta
Ret!rn" re#ectin$ a credita%le ta &it''eld (or t'e(o!rt'
)!arter" and a *ero taa%le income (or said+ear, -ence" respondent
fled a &ritten claim (orre(!nd %e(ore t'e petitioner,
• A letter o( a!t'orit+ (rom t'e .IR &as received %+
respondent" a!t'ori*in$ t'e eamination o( respondent/s
%oo0s and records (or t'e p!rpose o( eval!atin$ respondent/s
claim (or re(!nd,
• Respondent received a Preliminar+ Assessment
Notice and 1etails o( Assessment" assessin$
respondent defcienc+ MCIT incl!din$ interest" int'e a$$re$ate
amo!nt o( P
234"455"256,56, A&ritten protest to said preliminar+
assessment &asfled %+ respondent,
• Respondent received a Formal Letter o( 1emandand 1etails o(
Assessment demandin$ t'e pa+mento( t'e total amo!nt o( P
275"886"872,24" incl!sive o( interest, In response t'ereto"
respondent fled its(ormal &ritten protest reiteratin$ t'e
(ollo&in$de(enses:
o T'at it is eempt (rom" or is not s!%9ect to"
t'e 7 MCIT %+ virt!e o( its c'arter" P134; NO
RBLIND:
• Denerall+" a domestic corporation m!st pa+&'ic'ever is t'e
'i$'er o(: E3 t'e income ta !nderSection 78EA o( t'e NIRC o(
3;;8"as amended"comp!ted %+ appl+in$ t'e ta rate t'erein to
t'etaa%le income o( t'e corporation= or E7 t'e MCIT!nder Section
78E@" also o( t'e same Code"e)!ivalent to 7 o( t'e $ross income o(
t'ecorporation,
o T'e SC" 'o&ever" en!nciated t'at t'e$eneral r!le in
determinin$ t'e income tad!e (rom a domestic corporation !nder
t'e
provisions o( t'e NIRC o( 3;;8" as amended"can onl+ %e applied
to respondent onl+ as tot'e etent allo&ed %+ t'e provisions o(
its(ranc'ise,
• Bnder P1 34;
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dierence %et&een t'e %asic corporate income taE%ased on
taa%le income and t'e MCIT E%ased on$ross income" PAL is s!%9ect to
t'e frst ta +eteempted (rom t'e second,
o Alt'o!$' %ot' are income taes" t'e MCIT is
dierent (rom t'e %asic corporate income
ta" not 9!st in t'e rates" %!t also in t'e%ases (or t'eir
comp!tation, Not %ein$covered %+ Section 32Ea o( JP1K 34;
