Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act

## CREATE Act (R.A. No. 11534, signed March 26, 2021)

The CREATE Act reformed the Philippine corporate income tax and fiscal incentives system.

### Corporate income tax rates - **20%** — domestic corporations and resident foreign corporations with net taxable income not exceeding **P5,000,000** and total assets (excluding the value of land) not exceeding **P100,000,000**. - **25%** — all other corporations. - **15%** — export enterprises / registered business enterprises under the CREATE incentives framework, subject to conditions.

### VAT highlights - Sales to a **barangay micro business enterprise (BMBE)** with annual gross sales ≤ P3,000,000 are VAT-exempt. - Imposition of VAT on **non-resident digital service providers** (later implemented under R.A. 12023, 2024) for digital transactions.

### Incentives - Income tax holiday, special corporate income tax (SCIT) of 5%, enhanced deductions — granted through the **Fiscal Incentives Review Board (FIRB)** or Investment Promotion Agencies (IPAs) (Sec. 293–300).