Our firm continue to receive the same question from clients:
“Are CREATE incentives still available this year, and what’s different under CREATE MORE?”

The short answer: Yes. In fact, 2025 is one of the most strategic times to maximize them. The CREATE MORE Law has expanded and improved many of the benefits under the original CREATE framework, making them even more valuable for businesses.

What is CREATE?

The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, enacted in 2021 under RA 11534, was designed to:

• Lower corporate income tax rates
• Streamline and modernize the country’s tax incentive system
• Support businesses, especially MSMEs, in recovering from the economic impact of COVID-19
• Attract foreign and domestic investments through competitive fiscal incentives

Under CREATE, Registered Business Enterprises (RBEs) could enjoy reduced tax rates, income tax holidays, enhanced deductions, and VAT incentives, subject to strict qualifications and compliance requirements.

In 2024, RA 12066 or the CREATE MORE Law was passed, enhancing these provisions to make them more flexible, inclusive, and competitive with regional peers.

Key CREATE MORE Incentives for 2025

1. Lower Corporate Income Tax (CIT) Rates

• 20% CIT – For domestic corporations with taxable income of ₱5M or less and total assets of ₱100M or less (excluding land).
• 25% CIT – Standard rate for larger corporations.
• For RBEs under CREATE MORE: 20% CIT applies to registered activities regardless of income or asset size.

Legal Basis: RA 11534, RA 12066, BIR RR 7-2025

2. Bigger Deductions for Power Expenses
If electricity is a major operational cost, CREATE MORE allows RBEs to deduct 200% of actual power expenses from taxable income, turning utility bills into direct tax savings.

Legal Basis: RA 12066, DOF press releases

3. Extended Incentive Periods
Before: Incentives could last up to 17 years.
Now: Certain strategic and large-scale projects can enjoy incentives for up to 27 years, a substantial advantage for long-term investments.

Legal Basis: RA 12066, FIRB guidelines

4. VAT Rules – Wider Coverage, Fewer Disputes

• CREATE: VAT zero-rating applied only to goods and services “directly and exclusively used” in registered activities.
• CREATE MORE: Replaces this with “directly attributable,” broadening what qualifies to include some support services.

For RBEs selling locally, VAT is still remitted by the buyer to the BIR, but correct invoicing and documentation remain critical.

Legal Basis: BIR RMC 24-2022, BIR RR 9-2025, DOF guidance

What Your Business Should Do Now

1. Review Your Tax Profile – Confirm if you qualify as an RBE and whether you are under the Enhanced Deductions Regime (EDR).
2. Separate Income Streams – Distinguish registered from non-registered activities for correct tax application.
3. Update VAT Documentation – Align contracts, supplier letters, and internal checklists with the new “directly attributable” rule.
4. Track Power Costs – Ensure your accounting system allocates electricity expenses per registered activity.
5. Coordinate with Local Buyers – Ensure VAT responsibilities are clearly understood and complied with.

Bottom Line: CREATE and CREATE MORE are more than just tax laws, they are powerful tools for reducing costs and boosting competitiveness. Used properly, they can free up resources for hiring, upgrading operations, or expanding market reach.

However, eligibility is not automatic. Documentation must be complete, and compliance must be airtight, especially under BIR audit scrutiny.

Our firm can help you evaluate eligibility, structure operations to qualify, and prepare the necessary compliance documents to secure and maintain these incentives.