CREATE MORE for Corporate Decision-Makers: Structuring Investment, Incentives, and Commercial Commitments

CREATE MORE belongs in the investment model, not the tax appendix

RA No. 12066, the CREATE MORE Act, amended the Philippine incentives regime effective in late 2024, with implementing rules issued in February 2025. The framework applies to registered projects or activities and operates through the FIRB and the various Investment Promotion Agencies.

Distinguish the company from the particular project or activity registered for incentives.

A company may have registered and non-registered activities. RBE registration does not automatically extend the incentives to all its income, imports or local purchases. CREATE MORE links the benefits to the approved project or activity and contemplates separate registration certificates for separate registered projects or activities.

Make that distinction visible in the accounts, contracts, invoices, cost allocations, asset records and management reports.

The incentive decision is more than ITH versus five percent

CREATE MORE provides several income-tax pathways.

Registered export enterprises may choose an income tax holiday followed by either the 5 percent special corporate income tax regime or the enhanced deductions regime, or choose the applicable post-ITH regime in the manner allowed by law. Registered domestic-market enterprises may choose an income tax holiday followed by enhanced deductions, or elect enhanced deductions from the start of commercial operations. The election of an incentive package is generally irrevocable for the applicable entitlement period.

Under the enhanced deductions regime, the income-tax rate on taxable income from registered projects or activities is 20 percent, together with qualifying additional deductions. CREATE MORE includes, among other items, an additional deduction for qualifying power expense and, for eligible manufacturing and tourism reinvestment, a deduction subject to statutory limits. The 5 percent SCIT, by contrast, applies to export enterprises on gross income earned and is designed to operate in lieu of national and local taxes and local fees and charges within the statutory framework.

Compare the regimes using the actual projected business, rather than the rates alone.

A manufacturer with substantial depreciation, labor, power and other deductible costs may have a different result from a high-margin service exporter. Compare projected after-tax cash flows using realistic assumptions.

The 2026 SIPP matters because incentives begin with an eligible activity

In June 2026, the government approved the 2026 Strategic Investment Priority Plan. FIRB identifies priority areas that include clean energy, digital infrastructure, advanced manufacturing, agribusiness, and logistics, while the updated framework places greater emphasis on advanced technology and the digital economy, including cybersecurity, artificial intelligence, and data-center infrastructure.

Review the SIPP while screening the proposed investment.

Identify the activity to be registered, its industry and project tier, its location and the commitments that will form part of registration. Because incentive duration depends on classification and location, those decisions may affect the value of the package.

If you are comparing Laguna, Batangas, Cebu, Clark or another location, include the incentives alongside labor, logistics, utilities, property and supply-chain costs before choosing the site.

Local tax is now part of the 2026 implementation picture

Include local taxes in that comparison.

In 2026, the Department of Finance, DILG, and DTI issued Joint Memorandum Circular No. 01-2026 concerning local taxes, fees, and charges imposed on RBEs under CREATE MORE. The guidance took effect on March 30, 2026 and addresses, among other matters, the Registered Business Enterprise Local Tax for certain RBEs using the ITH or EDR in economic zones. The circular provides a framework under which the RBELT, when imposed by the LGU, is capped at 2 percent of the gross income of the registered project or activity and operates in lieu of the local taxes, fees, and charges covered by the statutory regime.

A calculation that includes national incentives but omits local taxes, real-property issues, zone arrangements or the particular site’s status may overstate the return.

Document those assumptions in both the legal review and the financial model.

VAT and procurement clauses can determine whether the projected benefit becomes real

CREATE MORE also addresses VAT zero-rating on qualifying local purchases, VAT-exempt importations, and customs-duty treatment, subject to statutory requirements and the relationship of the goods or services to the registered project or activity. For qualifying continuing treatment, the law imposes conditions, including the applicable export-sales requirements for registered export enterprises.

Check how procurement will support the claimed treatment.

Even where the law provides favorable VAT treatment, problems may arise if invoices are incorrect or purchases cannot be shown to be directly attributable to the registered activity. Mixed asset use needs a defensible allocation, and contracts should not assume a treatment the transaction does not qualify for.

Address taxes in major supply agreements. Depending on the transaction, specify VAT status, supporting documents, invoice requirements, changes in treatment, cooperation with certifications and who bears the cost if the expected exemption or zero-rating is unavailable.

The contract needs to address how the statutory treatment will be implemented.

An incentive is an asset with conditions attached

The CREATE MORE framework gives FIRB and IPAs significant compliance and monitoring functions. Performance metrics can form conditions of incentive availment. FIRB may verify RBE compliance, and the law provides mechanisms for suspension, withdrawal, or cancellation in cases of material violations. After due process, an IPA may also cancel registration, suspend incentives, or require refund of incentives, with interest and penalties, where the enterprise committed willful and material misrepresentation or submitted falsified or misleading information to obtain incentives beyond its entitlement.

After registration, keep the approval and its conditions available to the teams responsible for compliance.

Record the investment commitments, employment and export requirements, registered activities, location, approved assets, reports, filings and other conditions in the approval and applicable rules.

Assign each obligation to the team that can perform and monitor it. HR needs to know the employment commitments, the relevant team must track export ratios, and procurement must identify which registered project a purchase concerns.

The law shortened processing, but the contract should still protect the downside

The statutory processing framework starts from receipt of the required documents, not an informal inquiry or incomplete investment proposal. Confirm completeness, the deciding authority, any valid extension and the consequences of the particular decision under Section 297 and the implementing rules. Do not assume delay automatically grants the desired incentive.

A statutory processing period does not ensure that government approval will match the parties’ commercial timetable.

Where the investment depends on an incentive, decide whether registration is a condition precedent. Address pricing if the incentive is not granted, termination or restructuring rights, interim taxes and whether site, equipment, hiring or construction commitments should begin before approval.

Draft those provisions around the actual financial consequences of delay or refusal.

Boards should approve assumptions, not slogans

Show the board the project’s economics both with and without the targeted incentives.

Identify the conditions supporting the incentive case, the person responsible for each, the effect of delayed or narrower approval and the commitments already made in reliance on the benefit.

That gives the board a basis for deciding whether to proceed and on what conditions.

The proposed structure and compliance arrangements should support the incentive treatment assumed in the investment decision.

Project approval checklist