QuestionsQuestions (Republic Act No. 11534)
CREATE is known as the “Corporate Recovery and Tax Incentives for Enterprises Act” or “CREATE.”
The State aims to improve equity and efficiency of corporate taxation (lower rate, wider tax base, less distortions), develop a responsive performance-based incentives regime (targeted, time-bound, transparent), provide support for recovery from events like pandemics, and create a more equitable incentives system that promotes inclusive growth and jobs across all regions.
Only upon an order of the Secretary of Finance specifically identifying the needed information and the justification for such order in relation to incentives under Title XIII.
No. Disclosure is subject to confidentiality rules: the Secretary and relevant officers are covered by Section 270 unless the taxpayer consents in writing to disclosure.
Every six (6) months of each calendar year, he must submit to the Congressional Oversight Committee (through the Chairpersons of the Senate and House Ways and Means Committees) a report on the exercise of his powers under Section 204.
It includes one-person corporations, partnerships, joint-stock companies, joint accounts, associations, or insurance companies, but excludes general professional partnerships and certain joint ventures/consortia for construction projects and certain energy operations under an operating consortium agreement.
The general rate is 25%, effective July 1, 2020.
When its net taxable income does not exceed PHP 5,000,000 and its total assets do not exceed PHP 100,000,000 (excluding land where the office/plant/EQP are situated) during the taxable year.
A tax of 2% of gross income as of year-end, imposed beginning on the 4th taxable year after commencement, when MCIT is greater than the regular tax; from July 1, 2020 to June 30, 2023 the rate is 1%.
Dividends received by a domestic corporation are exempt from income tax under this Title, subject to conditions for foreign-sourced dividends (reinvestment in PH within the next taxable year, limits to working capital/capex/dividends/investment in domestic subsidiaries/infrastructure, and at least 20% direct shareholding held for at least 2 years).
Equivalent to 25% of taxable income from sources within the Philippines, effective July 1, 2020.
ROHQ pay 10% of taxable income, but effective January 1, 2022 they are subject to the regular corporate income tax.
Effective January 1, 2021, a tax equal to 25% of gross income received from sources within the Philippines (interests, dividends, rents, royalties, salaries, premiums, annuities, emoluments, fixed/determinable gains, and capital gains—except capital gains taxed under the special subparagraph).
A final withholding tax of 15% on cash/property dividends received from a domestic corporation, subject to a credit rule requiring that the domiciliary country grants a credit equivalent to the difference between the regular income tax rate and 15% (with specific timing language in the amendment).
It exempts sale of qualifying residential properties with specified price ceilings (e.g., residential lot up to PHP 2,500,000; house and lot and other residential dwellings up to PHP 4,200,000), with amounts adjusted starting January 1, 2024 every three years using the CPI.
A tax equivalent to 3% of gross quarterly sales/receipts, with cooperatives exempt from this 3% gross receipts tax; from July 1, 2020 to June 30, 2023, the rate is 1%.
The taxpayer must file a written claim within two years after payment; in proper cases, the Commissioner must grant refund within 90 days from complete submission; denial must state legal and factual basis in writing, and denial can be appealed to the Court of Tax Appeals within 30 days from receipt.
Incentives are granted by the Fiscal Incentives Review Board (or Investment Promotion Agencies under delegated authority) only to registered business enterprises, and only to the extent of their approved registered project/activity under the Strategic Investment Priority Plan.