Philippines – CREATE MORE Moves Closer to Full Implementation: BOI Drafts Rules for Income Tax Holiday and Special Corporate Income Tax
The implementation of Republic Act No. 12066, otherwise known as the “Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act” (“CREATE MORE”), is set to receive further development as the Board of Investments (“BOI”) works to finalize the rules governing the availment of the tax incentives provided under the said law.
In September 2026, the BOI invited registered business enterprises (“RBEs”) and other stakeholders to submit comments and recommendations on the proposed guidelines for the Special Corporate Income Tax (“SCIT”) incentive (“SCIT Guidelines”) and the draft revised guidelines on the Income Tax Holiday (“ITH”) incentive, which seeks to amend the BOI’s existing ITH availment guidelines under MC No. 2023-002 (“Revised ITH Guidelines”).
Certificate of Entitlement to Tax Incentives (“CETI”) and Application Periods for Availment
Under both proposed issuances, RBEs seeking to avail of ITH and Registered Export Enterprises (“REEs”) seeking to avail of SCIT must first secure a CETI from the BOI prior to the actual availment of the applicable income tax-based incentive.
Following the close of the taxable year, and before filing its Annual Income Tax Return (“AITR”) with the BIR, an RBE or REE, must apply for a CETI with the BOI Legal and Compliance Service (“BOI-LCS”) in accordance with the applicable requirements and pay the applicable fee.
The proposed Revised ITH Guidelines and SCIT Guidelines clarify that the issuance of a CETI or inclusion in the BOI’s master list of enterprises entitled to income tax-based incentives does not, by itself, constitute a final determination that the enterprise has complied with all conditions for the actual availment of the incentive. Compliance with the terms and conditions of the relevant project registration must still be established for the particular taxable year for which the incentive is being claimed.
For RBEs, ITH availment is limited to the approved project or activity registered under the Strategic Investment Priority Plan (SIPP). Applications for ITH must likewise be filed annually and on a per-project basis.
RBEs claiming ITH and REEs availing of SCIT must file their respective applications with the BOI within thirty (30) days from the statutory deadline for filing the AITR with the BIR.
Proposed SCIT Guidelines
The Implementing Rules and Regulations (IRR) of CREATE MORE provide that qualified RBEs, after the expiration of their ITH, may avail of the SCIT incentive for the prescribed period, provided that the enterprise complies with the target performance metrics specified under the terms and conditions of its registration. Under CREATE MORE, qualified RBEs and REEs may avail of SCIT equivalent to 5% of gross income earned (“GIE”), in lieu of national and local taxes, subject to applicable conditions.
At present, the procedure for availing of SCIT follows the existing BOI guidelines for ITH availment. Recognizing the need for guidelines specifically tailored to the availment of the SCIT incentive, the BOI has proposed a separate set of guidelines covering the availment of SCIT.
Special Rules for Expansion Projects
The proposed SCIT Guidelines provide that expansion projects or activities would be entitled to SCIT only to the extent of their actual increase in production or sales, or increase in capital investment, relative to the existing project or activity.
The proposed SCIT Guidelines also introduces a Rate of SCIT Exemption (“RSE”) for projects involving overlapping availment of ITH for an existing project and SCIT for an expansion project with an identified base figure.
Notably, the proposed issuances expressly clarify that the BOI’s approval and endorsement of the ITH availment remain subject to the BIR’s rules on assessment and collection. Thus, BOI approval does not preclude the BIR from examining the availment by the RBE or REE of these incentives in the course of its tax assessment and collection functions.
The full texts of the drafts of the Revised ITH Guidelines and the SCIT Guidelines are available on the official website of the BOI.
For further information, please contact:
Fernand Joseph D. Miranda, Partner, Cruz Marcelo & Tenefrancia
fd.miranda@cruzmarcelo.com
