Corporate Recovery And Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy
The country’s game-changing tax reform — enhanced to fully realize the Philippines’ potential as a global investment hub.
Signed into law on 08 November 2024, the CREATE MORE Act is a testament to the country’s strong commitment to rolling out the ‘red carpet’ for investors, attracting critical investments, and fostering a conducive and robust business environment.
Improves Ease of Doing Business (EODB)
Clarifies Rules on Availment of VAT Incentives
Enhances the Tax Incentive Packages
Strengthens Tax Incentive Governance and Accountability
Provides Clearer Transitory Rules for RBEs
REPUBLIC ACT NO. 12066
Tax Incentives Package under Title XIII of the Tax Code, as amended by RA No. 12066 (CREATE MORE Act)
| Available Fiscal Incentives | For Domestic Market Enterprise (DME) | For Registered Export Enterprise (REE) |
|---|---|---|
| Income Tax Holiday (ITH) | 4 – 7 years, depending on location and sectoral tiering | |
| Special Corporate Income Tax (SCIT) (of 5% of gross income in lieu of all national and local taxes, and local fees and charges) |
Not Applicable |
Maximum of 17 years for IPA-approved projects or 27 years for FIRB-approved projects. In no case shall the EDR be granted simultaneously with the SCIT. The SCIT or the EDR may be granted immediately at the start of commercial operations. |
| Enhanced Deductions Regime (EDR) (subject to a reduced corporate income tax rate of 20% based on net taxable income) |
Maximum of 17 years for IPA-approved projects or 27 years for FIRB-approved projects. The EDR may be granted immediately at the start of commercial operations. |
Maximum of 17 years for IPA-approved projects or 27 years for FIRB-approved projects. The EDR may be granted immediately at the start of commercial operations. |
| Duty Exemption on Importation | Time-bound (for the entire registration period reckoned from the date of registration) | Time-bound (for the entire registration period reckoned from the date of registration) |
| VAT exemption on importation and VAT zero-rating on local purchases | Only available to high-value DMEs |
Effectively perpetual (for the entire registration period as an RBE). After the expiration of the income tax-based incentives, the exporter shall be subject to the provisions of Sections 106, 108, and 109 for VAT purposes. |
| Maximum of 2% RBE Local Tax (in lieu of all local taxes, fees, and charges under the Local Government Code of 1991) | During the period of availment of the ITH and EDR, subject to the enactment of a local ordinance. | During the period of availment of the ITH and EDR, subject to the enactment of a local ordinance. |
For export and domestic market enterprises, enhanced deductions include: Depreciation allowance, Labor expense, Research and development expense, Training expense, Domestic inputs, Power expense, Reinvestment allowance, Enhanced net operating loss carry-over (NOLCO)|
Applies only to the importation of capital equipment, raw materials, spare parts, and accessories directly attributable to the registered project or activity of RBEs — including goods used for administrative purposes.
Applies only to goods and services directly attributable to the registered project or activity of an REE or registered high-value DME, including incidental expenses.
High-value DMEs refer to registered DMEs with investment capital exceeding ₱15 billion, engaged in sectors considered import-substituting or with export sales of at least USD 100 million in the preceding year.
| APPROVING AUTHORITY | IPA-APPROVED (₱15 BILLION AND BELOW) |
FIRB-APPROVED (EXCEEDING ₱15 BILLION) |
||||
|---|---|---|---|---|---|---|
| Tier I | Tier II | Tier III | Tier I | Tier II | Tier III | |
| National Capital Region (NCR) | ||||||
| Location / Industry Tiers | 4 ITH + 10 SCIT/EDR or 14 SCIT/EDR |
5 ITH + 10 SCIT/EDR or 15 SCIT/EDR |
6 ITH + 10 SCIT/EDR or 16 SCIT/EDR |
4 ITH + 20 SCIT/EDR or 24 SCIT/EDR |
5 ITH + 20 SCIT/EDR or 25 SCIT/EDR |
6 ITH + 20 SCIT/EDR or 26 SCIT/EDR |
| Metropolitan areas or areas contiguous and adjacent to NCR | ||||||
| Location / Industry Tiers | 5 ITH + 10 SCIT/EDR or 15 SCIT/EDR |
6 ITH + 10 SCIT/EDR or 16 SCIT/EDR |
7 ITH + 10 SCIT/EDR or 17 SCIT/EDR |
5 ITH + 20 SCIT/EDR or 25 SCIT/EDR |
6 ITH + 20 SCIT/EDR or 26 SCIT/EDR |
7 ITH + 20 SCIT/EDR or 27 SCIT/EDR |
| All other areas | ||||||
| Location / Industry Tiers | 6 ITH + 10 SCIT/EDR or 16 SCIT/EDR |
7 ITH + 10 SCIT/EDR or 17 SCIT/EDR |
7 ITH + 10 SCIT/EDR or 17 SCIT/EDR |
6 ITH + 20 SCIT/EDR or 26 SCIT/EDR |
7 ITH + 20 SCIT/EDR or 27 SCIT/EDR |
7 ITH + 20 SCIT/EDR or 27 SCIT/EDR |
| APPROVING AUTHORITY | IPA-APPROVED (₱15 BILLION AND BELOW) |
FIRB-APPROVED (EXCEEDING ₱15 BILLION) |
||||
|---|---|---|---|---|---|---|
| Tier I | Tier II | Tier III | Tier I | Tier II | Tier III | |
| National Capital Region (NCR) | ||||||
| Location / Industry Tiers | 4 ITH + 10 EDR or 14 EDR |
5 ITH + 10 EDR or 15 EDR |
6 ITH + 10 EDR or 16 EDR |
4 ITH + 20 EDR or 24 EDR |
5 ITH + 20 EDR or 25 EDR |
6 ITH + 20 EDR or 26 EDR |
| Metropolitan areas or areas contiguous and adjacent to NCR | ||||||
| Location / Industry Tiers | 5 ITH + 10 EDR or 15 EDR |
6 ITH + 10 EDR or 16 EDR |
7 ITH + 10 EDR or 17 EDR |
5 ITH + 20 EDR or 25 EDR |
6 ITH + 20 EDR or 26 EDR |
7 ITH + 20 EDR or 27 EDR |
| All other areas | ||||||
| Location / Industry Tiers | 6 ITH + 10 EDR or 16 EDR |
7 ITH + 10 EDR or 17 EDR |
7 ITH + 10 EDR or 17 EDR |
6 ITH + 20 EDR or 26 EDR |
7 ITH + 20 EDR or 27 EDR |
7 ITH + 20 EDR or 27 EDR |
| TYPE OF EXPENSE | DEDUCTIONS UNDER THE CREATE MORE |
|---|---|
| DEPRECIATION ALLOWANCE | +10% for buildings; +20% for machineries and equipment |
| RESEARCH AND DEVELOPMENT COSTS | +100% deduction |
| TRAINING EXPENSE | +100% deduction |
| DOMESTIC INPUT PURCHASED | +50% deduction |
| POWER EXPENSE | +100% deduction |
| REINVESTMENT ALLOWANCE TO MANUFACTURING AND TOURISM INDUSTRIES | +50% deduction (until 31 December 2034) |
| EXPENSES RELATED TO EXHIBITIONS, TRADE MISSIONS, OR TRADE FAIRS | +50% deduction |
| NET OPERATING LOSS CARRY-OVER (incurred during the first three years) |
Carried over within the next five consecutive years immediately following the last year of ITH entitlement period of the project |
Basis: RA 10083, Sec. 3 (amending Sec. 4[e] of RA 9490)
APECO is considered a “customs and taxation territory” separate from the rest of the Philippines. Goods you import into APECO for manufacturing, processing, or storage are not subject to customs duties or internal revenue taxes while inside the zone. This allows you to import raw materials, re-process or assemble products, and re-export without incurring the usual customs costs, making APECO an efficient hub for global trade.
Basis: RA 9490 Sec. 12, RA 10083 Sec. 15
When an APECO-registered enterprise buys goods or services in the Philippines that are directly and exclusively used for its registered operations, the seller charges 0 % VAT instead of the standard 12 %. The local supplier can still claim input VAT credits, so the tax burden is effectively removed from the transaction. VAT zero-rating means significant cost savings, stronger cash flow, and a more competitive position in global trade.
Basis: RA 10083, Sec. 3 (amending Sec. 4[f]); Sec. 4 (amending Sec. 5[k][2])
Enterprises can bring in raw materials, capital equipment, machinery, supplies, and spare parts completely free of import duties and taxes as long as they are used within APECO. For manufacturers, this significantly lowers production costs. For investors in logistics or warehousing, it means more competitive pricing for goods handled inside the freeport.
Basis: RA 10083, Sec. 4 (amending Sec. 5[k][1][b] and Sec. 5[k][3][a])
If your enterprise buys goods or services from suppliers in the domestic market, those sales are considered “export sales.” This gives your suppliers the same benefits as if they sold directly abroad, such as VAT zero-rating. It creates a win-win situation: you get competitive sourcing, and your suppliers get tax incentives.
APECO is opening its doors to forward-looking investors through an Early Adopter Lease Model designed to catalyze rapid industrial growth in the ecozone. By offering lease rates significantly lower than the current market value, APECO is providing investors with a rare opportunity to secure prime land and facilities at highly competitive costs. This approach is intentionally structured as a loss leader strategy—one that prioritizes attracting pioneering industries and establishing momentum for the zone’s full-scale development.
For investors, this means more than just cost savings. It is an invitation to shape the foundation of APECO’s industrial ecosystem. Early adopters enjoy not only low entry costs but also the strategic advantage of securing the best-located sites, tailored support from APECO’s management, and first-mover positioning in what is set to become a regional hub for logistics, renewable energy, fisheries, tourism, and defense-support industries. By anchoring their presence early, investors gain the leverage of long-term growth in land and facility value as APECO attracts more industries and expands infrastructure.
