What's in store under CREATE MORE

The Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy, also known as CREATE MORE (RA 12066), has recently been enacted into law.

- RIA MARIZ NADORA

This legislation amends certain provisions of the CREATE Act (RA 11534) to provide 'more' benefits for taxpayers.

Among its most interesting features are the improvement of the incentive packages and the relaxation of conditions for VAT exemption on importation and VAT zero-rating on local purchases of goods and services by registered business enterprises (RBEs), to name a few.

Foremost is the enhancement of the incentives available to RBEs. CREATE MORE allows RBEs to choose which incentive package to avail themselves of at the start of commercial operations and accordingly adjusts the applicable period for availing of the chosen package.

To recall, under the CREATE Act, RBEs initially enjoy an income tax holiday for four to seven years, depending on location and industry, before availing themselves of either the five percent special corporate income tax (SCIT), which is in lieu of all national and local taxes, or enhanced deductions for 10 years.

Under CREATE MORE, registered export enterprises are given the choice to skip the ITH and immediately avail either the SCIT or the enhanced deduction regime (EDR) incentive at the start of commercial operations. This is granted for 14 to 17 years if approved by the Investment Promotion Agency (IPA), or for 24 to 27 years if granted by the Fiscal Incentives Review Board (FIRB).