Tax Alert No. 14 [Ratified Version of Corporate Recovery and Tax Incentives for Enterprises Act (CREATE)]

The Bicameral Conference Committee, under the 18th Congress of the Philippines, approved the reconciled version of the House Bill No. 4157 and Senate Bill No.1357 or the Corporate Recovery and Tax Incentives for Enterprises Act (“CREATE”). The Committee Report on CREATE was ratified by the Senate and the House of Representatives on 3 February 2021. The enrolled bill is for signature of the Speaker of the House of Representatives and the Senate President.

If passed into law, CREATE would amend several provisions of the National Internal Revenue Code of 1997 (“Tax Code”) on corporate income taxation, passive income, and fiscal incentives, among others. CREATE, which replaced the Corporate Income Tax and Incentives Rationalization Act (“CITIRA Bill”) and the Tax Reform for Attracting Better and High-quality Opportunities (“TRABAHO Bill”), complements Package 1 of the comprehensive tax reform program, which proposes to lower the corporate income tax rate and rationalize corporate tax incentives in the country.