What incentives are available?

1. INCOME TAX HOLIDAY (ITH)

(Incentives menu under the CREATE Law)

    1. ITH of 4 to 7 years, depending on the location and industry
    2. Relocation from NCR: additional ITH of 3 years
    3. Located in areas recovering from disaster/conflict: additional ITH of 2 years

2. SPECIAL CORPORATE INCOME TAX (SCIT)

    1. 5 percent SCIT for 10 years (only for export enterprises)

3. ENHANCED DEDUCTIONS (ED)

    1. Depreciation allowance (10% for buildings, 20% for machinery)
    2. Labor expense (150%)
    3. Research and development (200%)
    4. Training expense (200%)
    5. Domestic input expense (150%)
    6. Power expense (150%)
    7. Reinvestment allowance to the manufacturing industry (Up to 50%)
    8. Enhanced NOLCO – losses during the first 3 years may be carried over within the next 5 consecutive years

4. Duty exemption of up to 17 and 12 years for export and domestic enterprises from the date of registration, respectively, unless otherwise extended under the SIPP

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FISCAL INCENTIVES REGISTRATION AND MONITORING SYSTEM (FIRMS)
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5. Value-added tax (VAT) exemption and zero-rating of registered export enterprises of up to 17 years from the date of registration,  unless otherwise extended under the SIPP.

The direct and exclusive use for the registered project or activity was expanded to include packaging materials, services, including the provision of basic infrastructure and utilities.

Period of availment of incentives based on location and industry priorities:

(Industry tiers are determined in the SIPP)

(A) For exporter activities

Location/Industry Tiers
Tier I
Tier II
Tier III
National Capital Region (NCR)
 4 ITH + 10 ED/SCIT 5 ITH + 10 ED/SCIT 6 ITH + 10 ED/SCIT
Metropolitan areas or areas contiguous and adjacent to NCR
 5 ITH + 10 ED/SCIT 6 ITH + 10 ED/SCIT 7 ITH + 10 ED/SCIT
All other areas
 6 ITH + 10 ED/SCIT 7 ITH + 10 ED/SCIT 7 ITH + 10 ED/SCIT

(B) For domestic market activities

Location/Industry Tiers
Tier I
Tier II
Tier III
National Capital Region (NCR)
 4 ITH + 5 ED 5 ITH + 5 ED 6 ITH + 5 ED
Metropolitan areas or areas contiguous and adjacent to NCR
 5 ITH + 5 ED 6 ITH + 5 ED 7 ITH + 5 ED
All other areas
 6 ITH + 5 ED 7 ITH + 5 ED 7 ITH + 5 ED

The President, upon the recommendation of the FIRB, may modify the mix, period or manner of availment of incentives for highly desirable project or specific industrial activity. Provided that the total period of ITH shall not exceed 8 years and the total period of incentives shall not exceed 40 years.

(C) For highly desirable projects or very specific industrial activities

  • The President of the Philippines may, in the interest of national economic development and upon the recommendation of the Fiscal Incentives Review Board, modify the mix, period or manner of availment of incentives provided under the CREATE Law or craft the appropriate financial support package for a high desirable project or a specific industrial activity if it meets the following conditions:
  1. The project has a comprehensive sustainable development plan with clear inclusive business approaches, and high level of sophistication and innovation, and
  2. Minimum investment capital of fifty billion pesos (P50,000,000,000.00) or its equivalent in US dollars, or a minimum direct local employment generation of at least ten thousand (10,000) within three (3) years from the issuance of the certificate of entitlement.
  • As stated under the CREATE Law, the grant of income tax holiday shall not exceed eight (8) years and the total period of incentive availment shall not exceed forty (40) years.