Incentives under Republic Act No. 12066 or Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE)
FIRB Advisory No. 007-2024
Interim Implementing Rules and Regulations (IRR) on the Availment of Incentives and Transfer of Registration
| FISCAL INCENTIVES FOR FAB REGISTERED ENTERPRISES | |||
| QUALIFICATION | INCENTIVE | ||
| Type of Enterprise | Business Activity Tier | Income Tax Holiday (ITH) | Taxes after ITH Period |
| Export Market Enterprise | Tier 1 | 6 years ITH + 10 years SCIT/EDR or 16 years SCIT/EDR | '- Duty Exemption on Importation - VAT Exemption on Importation - VAT-zero rating on local purchases of goods and services - Period of availment: Entire registration period as a FAB Registered Enterprise |
| Tier 2 | 7 years ITH + 10 years SCIT/EDR or 17 years SCIT/EDR | ||
| Tier 3 | 27 years ITH + 10 years SCIT/EDR or 17 years SCIT/EDR | ||
| Domestic Market Enterprise | Tier 1 | 6 years ITH + 10 years EDR or 16 years EDR | *Applies to High-value Domestic Market Enterprises '- Duty Exemption on Importation - VAT Exemption on Importation - VAT-zero rating on local purchases of goods and services Period of availment: Expiration of the income tax-based incentives |
| Tier 2 | 7 years ITH + 10 years EDR or 17 years EDR | ||
| Tier 3 | 27 years ITH + 10 years EDR or 17 years EDR | ||
Special Corporate Income Tax (SCIT) – shall be equivalent to a tax rate of five per cent (5%) based on the gross income earned (GIE) in lieu of all local and national taxes
Enhanced Deductions (ED) – this allows companies to deduct a range of assets and expenses from their taxable income, in addition to the allowable ordinary and necessary deductions, thereby bringing down the net taxable income
i. Twenty percent (20%) income tax rate upon the taxable income of Registered Business Enterprises;
ii. Additional depreciation allowance of the assets acquired for the entity’s production of goods and services (qualified capital expenditure);
iii. Additional deduction on labor expense;
iv. Additional deduction on research and development expense;
v. Additional deduction on training expense;
vi. Additional deduction on domestic input expense;
vii. Additional deduction on power expense;
viii. Deduction for reinvestment allowance to manufacturing and tourism industries;
ix. Additional deduction on expenses relating to exhibitions, trade missions, or trade fairs; and
x. Enhanced Net Operating Loss Carry-Over (NOLCO).
Business Activity Tiers – this tiered approach to incentives is based on the prioritization as detailed in the Strategic Investment Priority Plan (SIPP).
-Duty exemption on importation of capital equipment, raw materials, spare parts or accessories
– Value-added tax (VAT) exemption on importation and VAT zero-rating on local purchases of goods and services for Export Enterprises
– Domestic sales allowance of up to 30% of total sales for Export Enterprises
– One-Stop Shop
– Admission of duty-free and tax-exempt motor vehicles
– Investor’s visa for foreign nationals with minimum investment amount of US$ 75,000.00 in a FAB Registered Enterprise
