2011 Annual Report - BDO

21. TAXES21.01 Current and Deferred TaxesThe components of tax expense for the years ended December 31 follow:2011 2010Current tax expense:Final tax at 20%, 10% and 7.5% P 65,588,902 P 67,351,362Regular corporate income tax(RCIT) at 30% - FCDU 13,566,923 11,334,821Minimum corporate incometax (MCIT) at 2% - RBU 1,184,416 7,437,30880,340,241 86,123,491Deferred tax expense:Deferred tax relating toorigination and reversal oftemporary differences 24,963,444 ( 1,829,210 )Tax expense reported in thestatements of income P 105,303,685 P 84,294,281Current taxes include corporate income tax and final taxes paid on income from FCDUand final withholding tax on gross interest income from debt securities and other depositsubstitutes.Effective July 2009, RA No. 9504 was approved giving corporate taxpayers an option to claimitemized deductions or optional standard deduction (OSD) equivalent to 40% of gross income.Once the option to use OSD is made, it shall be irrevocable for the taxable year for which theoption was made.In 2011 and 2010, the Bank opted to continue claiming itemized deductions.The Bank is also subject to percentage and other taxes which consist principally of grossreceipts tax or GRT (presented as part of Taxes and Licenses in the statements of income).www.bdo.com.ph 103