b. Income

Income Subject to Regular Corporate Income Tax versus Gross Philippine Billings

Gross Philippine Billings covers gross revenue derived from the carriage of persons, cargo, or mail originating from the Philippines up to the final destination (Association of International Shipping Lines, Inc. v. Secretary of Finance and Commissioner of Internal Revenue, G.R. No. 222239, 15 January 2020)¹. Any other income acquired in the normal course of trade or business falls outside this scope and is subject to the regular corporate income tax¹.

Accordingly, demurrage and detention fees are subject to the regular corporate income tax rate rather than Gross Philippine Billings (Association of International Shipping Lines, Inc.)¹. Because Gross Philippine Billings strictly covers gross revenue from outbound carriage originating from the Philippines, other charges and fees acquired in the normal course of business form part of regular gross income (Association of International Shipping Lines, Inc.)¹.