Philippine President Signs the “CREATE MORE” Act

Philippine President Ferdinand “Bongbong” Marcos Jr. signed Republic Act No. 12066 (R.A. No. 12066), also known as the “Corporate Recovery and Tax Incentives for Enterprises – Maximizing Opportunities for Rebuilding Economic Resilience” (CREATE MORE) Act, in November 2023. The main goal of this legislation is to enhance the ease of doing business in the Philippines, provide more attractive tax incentives for Registered Business Enterprises (RBEs), and clarify the applicability of Value-Added Tax (VAT). It also aims to strengthen corporate governance, positioning the Philippines as an ideal investment destination globally.

Key amendments under the Act include extending the tax incentives for RBEs from the previous 14 to 17 years to 24 to 27 years. Additionally, the corporate income tax rate for companies adopting the Enhanced Deductions Regime (EDR) has been reduced from the current 25% to 20%. The extra deduction rate for electricity expenses has also been increased to 100%. For VAT, the Act provides clear conditions for applicability and sets specific timelines for tax refund processing. Moreover, a local tax ceiling has been established for RBEs, capping local taxes at no more than 2% of their total revenue. The implementing rules and regulations (IRR) of this Act will be issued within 90 days after its enactment.

Source: International Trade Administration