IMPROPERLY ACCUMULATED EARNINGS TAX (IAET)

Revenue Regulations No. 2-2001 was issued by the bureau to determine the Improperly Accumulated Earnings Tax on corporations.

Improperly Accumulated Earnings Tax (IAET) is imposed for each taxable year, a tax equal to 10% of the improperly accumulated taxable income of corporations.

The following corporations shall not apply of the Improperly Accumulated Earnings (IAET):

1. Banks and other non-bank financial intermediaries;

2. Insurance companies;

3. Publicly-held corporations;

4. Taxable partnerships;

5. General professional partnerships;

6. Non-taxable joint ventures;

7. Enterprises duly registered with the Philippine Economic Zone Authority (PEZA) under R. A. #7916, and enterprises registered pursuant to the Bases Conversion and Development Act of 1992 under RA# 7227.