President Rodrigo Duterte finally signed into law the much-awaited Corporate Recovery and Tax Incentives for Enterprises (Create) Act, or Republic Act 11534, on Mar. 26, 2021 — more than a year since the House of Representatives approved House Bill 4157 in September 2019.
The passage of Create finally confirmed the lowering of our regular corporate income tax (RCIT) rate from 30 percent to 25 percent (or 20 percent for those with total assets not exceeding P100 million and with net taxable income not exceeding P5 million). Create also added provisions that aim to provide relief to the negative impact of the coronavirus disease 2019 (Covid-19) pandemic. Most of all, it rationalized and revised our tax incentives regime to make it performance-based, targeted, time-bound and transparent.
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