Investors FAQs

Part 4: CREATE MORE Act

Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (Republic Act No. 12066)

General Provisions

Q1 What is the CREATE MORE Act?
The CREATE MORE Act (RA 12066) is a set of amendments to the original CREATE Act. It is designed to provide longer, more competitive tax incentives and to clarify VAT zero-rating and local tax rules for Registered Business Enterprises (RBEs).
Q2 What are the main areas of change?
Key improvements include:
  • Extension of Income Tax Holiday (ITH) periods.
  • Reduced Corporate Income Tax (CIT) for RBEs.
  • Enhanced Deductions for power and trade expenses.
  • Support for flexible work arrangements.

Corporate Income Tax & Enhanced Deductions

Q3 How does CREATE MORE change the CIT rate for RBEs?
The CIT rate for Registered Business Enterprises under the Enhanced Deduction Regime is reduced from 25% to 20%.
Q5 What are the changes to power expense deductions?
The additional deduction for power expenses has been increased from 50% to 100%, significantly lowering operational costs for energy-intensive industries.
Q6 Are there new deductions for market expansion?
Yes. A 50% additional deduction is now available for expenses related to exhibitions, trade missions, or trade fairs.

Incentive Periods & Large Projects

Q8 How much longer are the ITH periods?
  • High Priority Projects (HPPs): Max ITH extended from 6 to 8 years.
  • Innovation & High Tech (IH&T): Max ITH extended from 7 to 10 years.
Q9 What are the requirements for "Very Large Projects"?
To qualify for special incentives, projects must have a sustainable development plan AND meet one of these:
  • Minimum investment capital of P50 billion ($1B approx).
  • Generation of at least 10,000 direct local jobs within 3 years.

Compliance and Refunds

Efficiency Focus: The government has halved the processing time for tax refunds.
Q10 What is the new deadline for VAT refund processing?
The deadline for the government to act on VAT and Excise Tax refund claims has been shortened from 180 days to 90 days.
Q11 Is there an incentive for electronic sales reporting?
Yes. Costs for setting up electronic sales reporting systems are deductible:
  • Micro & Small Enterprises: 100% deduction.
  • Medium & Large Enterprises: 50% deduction.