Tax Alert No. 25 [Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) signed into law]

29 Mar 2021

On 26 March 2021, the President signed into law Republic Act (RA) No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. The law contains amendments to several provisions of the National Internal Revenue Code of 1997 (“Tax Code”), primarily on the reduction of the corporate income tax rate and the introduction of a new title on tax incentives.

The President, however, has vetoed certain items in the CREATE bill, to wit:

  • Increasing the Value-Added Tax (VAT)-exempt threshold on sale of real property and the adjustment in the threshold amount every three (3) years;
  • Ninety (90) day period for processing of general tax refunds, requirements in case of denial by the Commissioner and remedy of taxpayer in case of denial
  • Definition of investment capital;
  • Domestic market enterprises’ entitlement to special corporate income tax (SCIT) rate;
  • Specific share of the national government and local government units in the gross income earned using the SCIT rate;
  • Availment of a new set of incentives and its corresponding period of availment for qualified expansions or entirely new project or activity;
  • Allowing export enterprises registered prior to CREATE to avail of further extension of new incentives for the same activity;
  • Exercise of power by the Fiscal Incentives Review Board (FIRB) in granting incentives to registered projects or activities with a total investment capital of more than PH₱1bn;
  • Specific industries mentioned under activity tiers;
  • Provision granting the President the power to exempt any investment promotion agencies (IPA) from the coverage of Title XIII of CREATE;
  • Automatic approval of applications for incentives in case of inaction.

CREATE shall take effect fifteen (15) days from its complete publication in the Official Gazette or in a newspaper of general circulation. CREATE was published in the Business Mirror on 27 March 2021.


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Lyn Golez-Geronan

Lyn Golez-Geronan

Tax Librarian, PwC Philippines

Tel: +63 (2) 8845 2728