Preferential Taxation - Tax Incentives - CREATE Law

Investment Promotion Agencies (IPAs)

Government entities created by law, executive order, decree or other issuance in charge of promoting investments, granting & administering tax & non-tax incentives & overseeing operations of different economic zones and Freeport

Income generated from a registered project or activity

ITH shall be limited to ___.

4 to 7 years depending on location & industry priorities

Period of availment of ITH for both Export Enterprises (EEs) and Domestic Market Enterprises (DMEs)

5% on Gross Income Earned in lieu of all national & local taxes

Special Corporate Income Tax (SCIT) Rate for Export Enterprise

Expiration of ITH

SCIT is available only after ___.

Gross Sales/Revenue - Sales Discounts/Returns/Allowances - Cost of Sales

Computation of Gross Income

3% to National Government; 2% to Treasurer's Office of municipality or city where enterprise is located

Allocation: 5% SCIT is paid and remitted as follows ___.

+ 10% for buildings & + 20% for machineries & equipment

Enhanced Deduction (ED): Depreciation on qualified capital expenditures

+ 50%

ED: Labor expense

+ 100%

ED: Research and development expense

+ 100%

ED: Training expense

+ 50%

ED: Domestic input expense

+ 50%

ED: Power expense

Max. 50% within 5 years from time of reinvestment

ED: Reinvestment allowance to Manufacturing Industry
* Reinvests undistributed profits & surplus in any projects/activities listed in SIPP

May be deducted within the next 5 years immediately following year of loss

ED: NOLCO for the first 3 years

Application for registration

Option to avail either SCIT or ED after ITH shall be exercised at the time of ___.

Additional 2 years of ITH

ITH for projects or activities located in areas recovering from armed conflict or a major disaster

Additional 3 years of ITH

ITH for projects or activities relocating from the NCR

Expiration of initial ITH

Projects/activities Relocating from NCR: For existing project/activity registered under this ACT, additional 3 years shall commence after ___.

Expiration of transition period

Projects/activities Relocating from NCR: For existing project/activity under the transition period of this ACT, additional 3 years shall commence after ___.

Certificate of Entitlement to Tax Incentives (CETI)

Proof of entitlement to additional 3 years of ITH

3 years

The industry & locational prioritization shall be subject to review and revision every ___.

Custom duties

The importation of capital equipment, raw materials, spare parts & accessories shall be exempt from ___.

Net book value

Customs Duty Exemption: If sold, transferred, or disposed within the first 5 years from date of importation, the RBE shall be required to pay duties based on the ___.

Twice the amount of duty exemption

Customs Duty Exemption: If RBE sells, transfers, or disposes without prior approval of concerned IPA, the RBE and vendee, transferee or assignee shall be solidarity liable to pay ___.

Amount corresponding to exempt duties on importation.

Customs Duty Exemption: If used for a non-registered project/activity within the first 5 years from date of importation, the RBE shall pay ___.

In proportion to utilization in non-registered project/activity

Customs Duty Exemption: If part-time utilized in a non-registered project/activity, the amount corresponding to the duties exempt shall be paid ___.

VAT Exemption & VAT zero-rating

VAT Exemption: ___ on importation & ___ on local purchases.

True

True or False: Importation of petroleum products shall be subject to payment of applicable duties & taxes upon importation into Philippine customers territory and/or into free zones.

Direct export such as sale to international carriers or sea vessels engaged in international trade

Importer of petroleum products can file claims for refund of duties & taxes for ___.