What is this new law?

Quite recently, you may have heard of the approved Comprehensive Recovery and Tax Incentives for Enterprises (CREATE Act / Republic Act 11354) that was officially active last April 11, 2021. This is a bill that was passed to assist businesses as a response to the pandemic, with retroactive provisions and lower tax rates.


How does this affect me?

One of the tax forms affected by the CREATE Act is the Quarterly Income Tax for Corporations & Partnerships (1702Q). From the original 2% MCIT (Minimum Corporate Income Tax) Rate, to help these entities, it has been reduced to 1%.

In summary, the table below comprehensively shows all the changes implemented with regard to new Income Tax rates applicable to the regular taxable income of corporations.

Tax Changes

Affects Who

Effective From

Up Until

25% Tax Rate + 1% MCIT

Domestic Corporations

Resident Foreign Corp

July 1, 2020

June 30, 2023

25% Tax Rate + 1% MCIT

Regional Operating Headquarters (ROHQ)

January 1, 2022

June 30, 2023

25% Tax Rate

Non-Resident Foreign Corporation

January 1, 2021

Indefinite

20% Tax Rate + 1% MCIT

Corp w/ net taxable income not exceeding ₱5 million, and total assets not exceeding ₱100 million (excluding land properties)

July 1, 2020

June 30, 2023

1% Tax Rate

Proprietary Educational Institutions and Hospitals

July 1, 2020

June 30, 2023

Source: Revenue Regulations No. 5-2021


Taxumo is CREATE-ready

Good news! These changes implement for corporate income tax have been reflected in Taxumo's 1702Q forms. Thus, when filing, your due taxes will be computed using these new rates. Presently, this has become the default so even new Taxumo subscribers can take advantage of the 1% rates. You no longer need to recalculate manually and go through all of that hassle! Now here's what it looks like under the Tax Dues tab:

Sound like good news? We have even more. If you filed your ITR for Corp and Partnerships forms for 2020 Q3 and Q4 in Taxumo, any excess payment you made there can be used as credits in your subsequent filings. Taxumo will compute the excess you paid and then use those as credits starting 2021 Q1.

If you've already filed your 1702Q form for Q1 - Q3 2020 (prior to CREATE Act) in Taxumo, simply file an amendment filing by clicking the following links below:

  1. Q3 2020

  2. Q1 2021

  3. Q2 2021


Do all of these numbers, percentages, and codes seem confusing? Then you're at the right place. Taxumo's mission has always been to make tax filing digestible, and more convenient for Filipinos. This is why we ensure that our systems and forms are always consistent with the changes BIR implements.

What are you waiting for then? Head on over to your Taxumo account to avail of these lower tax rates. In case you don't have a Taxumo account yet, now's a good time to sign-up and subscribe for a hassle-free tax filing experience!

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