CREATE MORE Act ( RA 12066)

President Ferdinand R. Marcos Jr. signed the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act (RA 12066) on November 8, 2024.

RA 12066 is an Act amending Sections 27, 28, 32, 34, 57, 106, 108, 109, 112, 135, 237, 237-A, 269, 292, 293, 294, 295, 296, 297, 300, 301, 308, 309, 310, and  311, and adding new Sections 135-A, 295-A, 296-A, and 297-A of the National Internal Revenue Code (NIRC) of 1997, as amended, and for other purposes. 

The Act introduced amendments to the provision of the NIRC of 1997 on Corporate Income Tax (CIT), Value-added Tax (VAT) and incentives to be enjoyed by a Registered Business Enterprises (RBEs), among others.

RBEs under the Enhance Deduction Regime (EDR) will be subjected to twenty percent (20%) CIT for on the RBEs taxable income derived from the registered activities during the taxable year. Prior to the amendment, the 20% tax generally applies to corporations with net taxable income not exceeding P5 million and with total assets not exceeding P100 million.

As amended, Sections 106 and 108 provides specific condition for vat exemptions and qualified for a zero-rating as follows:

• Importation of goods by enterprises who export at least 70% of their previous year’s annual production are vat exempt.
• The sale of goods and services to enterprises who export at least 70% of their previous year’s annual production are qualified for zero-rating.

In addition, Section 295(D) of the Tax Code was also amended to provide that only activities "directly attributable" to the registered project or activity shall benefit from VAT exemption on importation and VAT zero-rating on local purchases of goods and services, regardless of the location of these enterprises. This broaden the scope of VAT incentives covering services such as janitorial, security, finance consultancy, and administrative services including legal and accounting services.