The Philippine Senate passed the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (Create More) Act on 9 September 2024.
The Create More Act modifies the Create Act, which was enacted in 2021 to implement significant tax reforms.
The Create Act introduced enhanced deductions for qualifying export and domestic market enterprises, which were renamed the enhanced deductions regime (EDR) under the Create More Act.
An income tax holiday was introduced, offering an option for a special income tax rate of 5%.
The Act enhances the EDR incentive by offering eligible enterprises a reduced corporate tax rate of 20%. The reduced CIT aims to encourage businesses to choose the EDR over the special tax rate of 5%, which could lead to additional top-up taxes under the 15% Pillar Two global minimum tax.
The EDR is enhanced with a 20% rate, a rise in the enhanced deduction for power expenses from 50% to 100%.
A new 50% enhanced deduction has been introduced for exhibition-related expenses.
A 50% reinvestment allowance deduction has been amended to include qualifying tourism companies, which was only available for manufacturing entities.
