Understanding Create provisions that encourage investments and reinvestments

As many of us may be aware by now, the recently ratified Corporate Recovery and Tax Incentives for Enterprises (Create) bill, which now awaits President Rodrigo Duterte’s approval, proposes to reduce the regular corporate income tax (RCIT) rate from 30 percent to 25 percent for large businesses and to 20 percent for small and medium enterprises. In addition, Create contains several novel provisions that encourage investment and reinvestment in the Philippines, as well as investments in “critical” activities and areas outside Metro Manila.

Tax exemption of foreign-sourced dividends