Key Incentives under CREATE MORE (RA 12066)
1. Reduced Corporate Income Tax under Enhanced Deductions Regime (EDR)
Registered Business Enterprises (RBEs) that elect the EDR get their corporate income tax (CIT) reduced from 25% to 20%.
In lieu of all national and local taxes under certain conditions (e.g., when availing the 5% Special CIT).
2. Special Corporate Income Tax (SCIT) option
RBEs may choose either the SCIT (5%) or EDR from the start of commercial operations in some cases.
3. Longer Duration of Incentive Availability
The maximum period during which RBEs may avail tax incentives is extended to 27 years (from previously 17 years).
More precisely, depending on whether approved by Investment Promotion Agencies (IPAs) or by the Fiscal Incentives Review Board (FIRB), the duration under SCIT/EDR or EDR alone may be:
14–17 years under IPAs; or
24–27 years under FIRB, for certain high-value/export/refined projects.
4. Additional Deductions
Power expenses: Additional deduction for power expenses is increased to 100% from 50%. This applies to power used for the registered project/activity.
Tourism reinvestment, trade fairs / exhibitions / trade missions: 50% additional deduction for such expenses for tourism-related reinvestments and trade promotion until a specified period.
5. VAT / Duty Incentives
VAT exemption on importation and zero-rating of local purchases for exporters whose export sales amount to at least 70% of total production in the previous year.
Restoration of “directly attributable” standard (instead of “direct and exclusive use”) for goods and services (including janitorial, security, marketing, HR, legal, consulting etc.) so that more operational inputs qualify for VAT-zero or VAT-exemption status.
More efficient VAT/duty refund procedures, with clearer timelines and reduced documentary requirements.
6. Local Tax Simplification
RBEs may opt to pay a single local tax called the Registered Business Enterprise Local Tax (RBELT), not exceeding 2% of gross income, in lieu of all other local taxes, fees, and charges during their Income Tax Holiday (ITH) or Enhanced Deductions regime.
7. Income Tax Holiday (ITH) / Transition Options
Under the prior CREATE law, ITH of 4–7 years depending on location/industry, followed by either SCIT or EDR for a period (then 10 years under CREATE). CREATE MORE allows RBEs (especially export enterprises) to skip the ITH and immediately avail either SCIT or EDR in some cases.
For projects still under pre-CREATE, there is a possibility of transferring to CREATE or CREATE MORE incentive schemes under strict rules.
8. Other Incentives and Reforms
Tax or duty exemption for donations of capital equipment, raw materials, spare parts, or accessories to government agencies, GOCCs, TESDA, SUCs, DepEd or CHED-accredited schools.
Institutionalization of flexible work arrangements (e.g. work-from-home) for RBEs inside economic zones / freeports without loss of incentives.
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Assisted by ChatGPT AI app, October 12, 2025.
