A tax at the rate of 21 percent (21%) is hereby imposed for each taxable year on the taxable income of every major corporation. For all major corporations’ taxable year ending on or before March 30, 2011, 25.5% tax rate shall apply to the entire taxable year. For all major corporations’ taxable year ending on or after March 31, 2011, 21 percent tax rate shall apply to the entire taxable year.
The taxable income of a major corporation equals its income, before income taxes, earned in the taxable year as determined under International Financial Reporting Standard (hereinafter, “IFRS”) or Generally Accepted Accounting Principles (hereinafter, “GAAP”), as IFRS or GAAP, as the case may be, is regularly utilized to calculate taxable income in the major corporation’s principal shareholder’s, if a corporation, place of incorporation or, if an individual, country of primary residence.
Any major corporation that is not engaging in business in the Federated States of Micronesia or a business operating in the Federated States of Micronesia pursuant to section 360 of this chapter and remits tax pursuant to section 321 of this chapter is exempt from the requirements of title 54, chapter 1, subchapter IV: Taxation of Gross Revenues of this title, for each taxable year that the major corporation has remitted tax pursuant to section 321 of this chapter.
Source: PL 13-71 § 9.
Cross-reference: The statutory provisions on Corporations and Business Associations are found in title 36 of this code. The statutory provisions on Commercial Law are found in title 33 of this code.