The Philippines finance and trade chiefs have signed the Implementing Rules and Regulations (IRR) of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act ahead of the July 10 deadline, the Department of Finance said.
The CREATE law, which aims to reduce corporate income taxes, was signed into law by President Rodrigo Duterte in March.
The signing of the implementing rules and regulations (IRR) of the tax incentives reform aspects of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act will jumpstart the government’s aim to lure more investments and boost economic recovery.
Investors would gain “more solid footing” to make decisions about investing in the Philippines after the signing of the IRR on June 21, 2021.
CREATE law cuts the regular corporate income tax rate by up to 10 percent — from 30 percent to 20 percent for domestic corporations with a taxable income of PHP5 million and below, and with total assets of not more than PHP100 million; and 25 percent for big corporations with assets of above PHP100 million. It also introduces an improved incentives package that is performance-based, time-bound, targeted, and transparent.
“These provisions in the IRR are all intended to ensure that the law is properly implemented following the core principles of granting incentives based on the significant contribution of business enterprises to the economy,” Finance Secretary Carlos Dominguez III said.
The IRR takes effect immediately following the publication in a newspaper of general circulation, the agency said.