Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law
Download as PDF
Download as Word
Collections
Create new Collection
Overview
Full Text
Details
Case
Agency Issuance Number
Published Date
Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law
Republic Act No. 11534
March 26, 2021
Case Overview and Summary
Summary of Republic Act No. 11534 (Corporate Recovery and Tax Incentives for Enterprises Act or CREATE)Short Title and Declaration of Policy (Sections 1-2)
• The Act is known as the "Corporate Recovery and Tax Incentives for Enterprises Act" or "CREATE".
• It aims to develop the national economy towards global competitiveness by implementing tax policies to attract investments, enhance productivity, generate employment, promote inclusive growth, and maintain fiscal prudence.
Amendments to the National Internal Revenue Code (Sections 3-16)
• Amends various sections of the National Internal Revenue Code of 1997 related to:
- Submission of tax-related information to the Department of Finance (Section 20)
- Definition of "corporation" (Section 22)
- Tax on cash and property dividends, interest income, and capital gains (Section 25)
- Corporate income tax rates (Section 27)
- Tax rates for foreign corporations (Section 28)
- Repeal of the improperly accumulated earnings tax (Section 29)
- Deductions from gross income (Section 34)
- Tax-free exchange of property (Section 40)
- Withholding of tax at source (Section 57)
- Exempt transactions from value-added tax (VAT) (Section 109)
- Tax on persons exempt from VAT (Section 116)
- Authority of the Commissioner to refund taxes (Section 204)
- Congressional Oversight Committee (Section 290)
New Title XIII on Tax Incentives (Section 16)
• Introduces a new Title XIII on Tax Incentives, covering the following:
General Provisions on Tax Incentives (Chapter I)
- Scope and coverage of the Act (Section 291)
- Extent of authority to grant tax incentives (Section 292)
- Definitions of key terms (Section 293)
Tax and Duty Incentives (Chapter II)
- Types of tax incentives that may be granted (Section 294):
• Income Tax Holiday (ITH)
• Special Corporate Income Tax (SCIT) Rate of 5% for export enterprises, domestic market enterprises with minimum investment capital of ₱500 million, and critical domestic market enterprises
• Enhanced Deductions (ED) for various expenses
• Duty exemption on importation of capital equipment, raw materials, spare parts, or accessories
• VAT exemption on importation and VAT zero-rating on local purchases
- Conditions for availing tax incentives (Section 295)
- Period of availment of incentives (Section 296):
• For export enterprises and critical domestic market enterprises: 4-7 years ITH + 10 years SCIT/ED
• For domestic market enterprises: 4-7 years ITH + 5 years SCIT/ED
• Additional incentives for enterprises in conflict/disaster areas or relocating from NCR
The Fiscal Incentives Review Board (Chapter III)
- Expanded functions and powers of the Fiscal Incentives Review Board (Section 297)
- Reconstituted composition of the Board (Section 298)
- Organizational structure and staffing pattern (Section 299)
Qualified Projects or Activities for Tax Incentives (Chapter IV)
- Strategic Investment Priority Plan (Section 300)
- Power of the President to grant incentives for highly desirable projects (Section 301)
- Amendments to the Strategic Investment Priority Plan (Section 302)
- Publication requirements (Section 303)
- Qualifications of registered business enterprises (Section 304)
Tax Incentives Management and Transparency (Chapter V)
- Filing of tax returns and submission of tax incentives reports (Section 305)
- Monitoring, evaluation, and reporting of tax incentives (Section 306)
- Conduct of impact evaluation on tax incentives (Section 307)
- Penalties for non-compliance with filing and reporting requirements (Section 308)
Transitory and Miscellaneous Provisions (Chapter VI)
- Prohibition on registered activities outside designated zones/freeports (Section 309)
- Establishment of one-stop action centers (Section 310)
- Treatment of investments prior to the Act's effectivity (Section 311)
Repealing and Amendatory Clauses (Sections 17-18)
• Repeals and amends various provisions of existing laws that are inconsistent with the Act.
Separability Clause, Appropriation, Implementing Rules and Regulations, and Effectivity (Sections 19-22)
• Includes standard provisions on separability, appropriation, implementing rules and regulations, and effectivity date.
Amends
n/a
Amended by
n/a
Tags
Statutes
Republic Acts
tax incentives
corporate income tax
investment promotion agencies
fiscal incentives review board
strategic investment priority plan
registered business enterprises
income tax holiday
special corporate income tax rate
enhanced deductions
duty exemptions
value-added tax exemptions
tax reporting
tax monitoring
cost-benefit analysis
Law
Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law
Republic Act No. 11534
•March 26, 2021
March 26, 2021
REPUBLIC ACT NO. 11534
AN ACT REFORMING THE CORPORATE INCOME TAX AND INCENTIVES SYSTEM, AMENDING FOR THE PURPOSE SECTIONS 20, 22, 25, 27, 28, 29, 34, 40, 57, 109, 116, 204 AND 290 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND CREATING THEREIN NEW TITLE XIII, AND FOR OTHER PURPOSES
SECTION 1. Short Title. — This Act shall be known as the "Corporate Recovery and Tax Incentives for Enterprises Act" or "CREATE."
SECTION 2. Declaration of Policy. — It is hereby declared the policy of the State to develop the national economy towards global competitiveness by implementing tax policies instrumental in attracting investments, which will result in productivity enhancement, employment generation, countrywide development, and a more inclusive economic growth, while at the same time maintaining fiscal prudence and stability.
To achieve these objectives, the State shall:
(a) Improve the equity and efficiency of the corporate tax system by lowering the rate, widening the tax base, and reducing tax distortions and leakages;
(b) Develop, subject to the provisions of this Act, a more responsive and globally-competitive tax incentives regime that is performance-based, targeted, time-bound, and...
Login to see full content
Amends
n/a
Amended by
n/a