The Fiscal Incentives Review Board (FIRB) issued FIRB Advisory No. 007-2024 on December 17, 2024, circularizing the interim Implementing Rules and Regulations (IRR) of Republic Act No. 12066, also known as the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act.
Scope and Coverage
The advisory implements provisions for applications for registration for new and qualified expansion projects, transfer of registration for RBEs granted incentives before RA 11534 (CREATE Act), and availment of Value-Added Tax (VAT) and duty incentives for RBEs.
The interim IRR applies to all existing Investment Promotion Agencies (IPAs), business enterprises with new or qualified expansion projects listed in the Strategic Priority Plan (SIPP), RBEs with existing projects registered before the CREATE Act, RBEs with investment capital exceeding PHP 15 billion during CREATE’s effectivity, and business enterprises with pending tax incentives applications before November 28, 2024.
Application Processing
The concerned IPA may process applications for registration under CREATE MORE and grant the incentives therein pending the effectivity of its IRR, provided they comply with the requirements of the CREATE Act. Upon CREATE MORE’s effectivity, its provisions will govern the processing of applications.
Transfer of Registration
Pre-CREATE Act and CREATE Act RBEs with investment capital exceeding PHP 15 billion may transfer their registration to CREATE Act and CREATE MORE, respectively. Subject to conditions such as being in the pre-operating or operating stage without availing of income tax-based incentives and meeting the qualifications under the CREATE Act and SIPP.
Filing of Application
RBEs qualified to transfer their registration under this interim IRR must submit an Affidavit of Intent (Annex A) to the concerned IPA on or before December 31, 2024, followed by their application for transfer using the prescribed application form under Part III, Rule 6 of the IRR of CREATE. Late submissions will not be considered.
Registration and Evaluation Process
The concerned IPA shall evaluate applications within twenty (20) days of receiving complete submissions and must act on all transfer applications within thirty (30) days from the effectivity of CREATE MORE. Approval or disapproval will be based on investment capital thresholds. The IPA must report all newly registered projects to the FIRB Secretariat monthly.
Once approved, the RBE must surrender its existing Certificate of Registration or Certificate of Registration and Tax Exemption for cancellation and will receive a new Certificate of Registration under the CREATE Act or CREATE MORE.
Performance Commitments and Reckoning Period
Transferee projects or activities must meet investment capital, job generation, export threshold, and other performance commitments set by the IPA. Failure to comply may result in the cancellation, suspension, or withdrawal of incentives.
For operating RBEs with new certificates, the reckoning period for incentives begins on January 1, 2025. For pre-operating RBEs, it will follow the terms outlined in their Certificate of Registration.
Transitory Provisions
Provisions of Section 311 of the NIRC of 1997, as amended, and Section 31 of CREATE MORE will take effect on November 28, 2024, regardless of the absence of its IRR. RBEs enjoying VAT zero-rating on local purchases and VAT exemption on importation before the CREATE Act may continue to do so until December 31, 2034.
The concerned IPA will amend existing Certificates of Registration and issue VAT Zero-rating Certificates or Certificates of Authority to Import as necessary. Processing of VAT Zero-rating Certificates will follow the IRR of CREATE MORE IRR upon its effectivity.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants
P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd.
As published in SunStar Cebu, dated 05 March 2025
