In late 2024 the Philippines rewrote its investment incentives again. CREATE MORE — Republic Act No. 12066, signed November 11, 2024 — amended the earlier CREATE law to make the regime more generous and more predictable for registered business enterprises (RBEs). If you're weighing an incentivised setup through PEZA, the BOI, or another investment promotion agency, these are the changes that matter.
A lower headline rate: 20%
The most quotable change is the corporate income tax rate. Under the Enhanced Deductions Regime (EDR), CREATE MORE cut the CIT rate for RBEs to 20%, down from 25%. For an RBE that runs on the deductions route rather than the gross-income route, that's a direct, permanent reduction in the rate applied to taxable income.
Choose your lane from day one
CREATE MORE clarified that an RBE picks its incentive lane at the start of commercial operations, rather than being defaulted into one:
| Regime | How you're taxed |
|---|---|
| Special Corporate Income Tax (SCIT) | 5% on gross income earned, in lieu of all national and local taxes |
| Enhanced Deductions Regime (EDR) | 20% CIT on taxable income, with extra deductions |
The SCIT's appeal is its sweep — 5% on gross income in place of virtually every other national and local tax. The EDR's appeal is the deductions. Which wins depends on your cost structure, and CREATE MORE lets you make that choice upfront.
Tip
SCIT is computed on gross income; EDR on taxable income after enhanced deductions. A capital- and labour-heavy operation often does better under EDR's deductions, while a lean, high-margin one may prefer the flat 5% SCIT. Run both before you commit.
Bigger deductions under EDR
The enhanced deductions themselves got richer. The standout is power — CREATE MORE raised the additional deduction on power expense to 100%, a meaningful break for energy-intensive manufacturers. Other enhanced deductions include 100% for research and development, 100% for training, and additional deductions for domestic inputs, labour, and trade exhibitions. These stack on top of the lower rate, not instead of it.
Why it's aimed at foreign investors
CREATE MORE's purpose was to keep the Philippines competitive for mobile, export-oriented investment — BPOs, IT, and manufacturing-for-export among them. To access any of it, your activity has to align with the Strategic Investment Priority Plan and you register with the appropriate investment promotion agency, such as PEZA or the BOI. The incentives flow from that registration, the same way they do for a PEZA enterprise.
How to think about it
CREATE MORE doesn't change who qualifies so much as how good the deal is once you do. If you were already considering an incentivised structure, the math improved: a lower EDR rate, a clean upfront choice between SCIT and EDR, and fatter deductions. The decision still starts where it always did — does your business fit a registrable, priority activity — but the payoff for clearing that bar is now larger.
Key takeaways
- CREATE MORE (RA 12066, 2024) cut the EDR corporate income tax rate for RBEs to 20% from 25%.
- RBEs choose between the 5% SCIT (on gross income) and the EDR (20% on taxable income) from the start of operations.
- Enhanced deductions grew — notably a 100% additional deduction on power expense.
- Incentives still require a priority activity and registration with an agency like PEZA or the BOI.
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