Amendment of Corp. Tax Rates under National Revenue Code

Republic Act No. 1148 further amends Section 24 of Commonwealth Act No. 466.
Section 24 governs the rate of tax on corporations.
Republic Act No. 1148 keeps the corporate income tax imposed as a tax on total net income for the preceding taxable year.

The law requires an annual corporate income tax on total net income received in the preceding taxable year.
The tax is imposed on corporations organized in, or existing under the laws of the Philippines, and it is also imposed on certain foreign corporations for Philippine-source income.
The tax is computed as the sum of two bracketed amounts based on total net income thresholds.
The law includes special rates for specific categories of corporations and special treatment for dividends.

Section 24(a) imposes an annual tax on every corporation organized in, or existing under the laws of the Philippines, “no matter how created or organized,” except duly registered general co-partnerships (compaAias colectivas).
Section 24(a) imposes a like annual tax on every corporation organized, authorized, or existing under the laws of any foreign country for its total net income received in the preceding taxable year from all sources within the Philippines.
The tax base is total net income received in the preceding taxable year from all sources, for domestic and resident corporations.
The tax base is total net income received in the preceding taxable year from all sources within the Philippines, for foreign corporations.

Section 24(a) requires a corporate tax equal to the sum of:
- 20% upon the amount by which total net income does not exceed PHP 100,000; and
- 28% upon the amount by which total net income exceeds PHP 100,000.
The rates apply to the annual taxation of corporate total net income received in the preceding taxable year.

Section 24(a) requires Building and Loan Associations, operating as such under the Corporation Law (as amended) in accordance with Sections 171 to 190, to pay 12% on their total net income.
Section 24(a) requires private educational institutions to pay 10% on their total net income.
Section 24(a) provides a special dividend treatment: for dividends received by a domestic or resident foreign corporation from a domestic corporation liable to tax under this Chapter or from a domestic corporation engaged in new and necessary industry as defined under Republic Act No. 901, only 25% of such dividends is returnable for purposes of the tax imposed by Section 24.

Section 2 applies Republic Act No. 1148 to income received from January 1, 1954.

Section 3 provides that Republic Act No. 1148 takes effect upon approval.
The approval date is June 17, 1954.