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REPUBLIC
REPUBLIC OFTHE
OF THE PHILIPPINES
PHILIPPINES
DEPARTMENT
DEPARTMENT OF
OF FINANCE
FINANCE
DEPARTMENT
DEPARTMENT OF
OF TRADE AND INDUSTRY
TRADE AND INDUSTRY
r H I L I Pr P I Nn EE Ss
P

SUBJECT :
SUBJECT AMENDING RULE 2.
AMENDING 4, s
2, SECTIONS 4, AND
5 A N D 8;
8; RULE 3.
3, SECTION
SECTION 3;
3; RULE 17,
17,
SECTION 2,
SECTION 2, AND
AND RULE 18
18 SECTION 5. AND
SECTION 5, AND ADDING
ADDING A NEW
NEW RULE 18
18 SECTION
SECTION
6
6 OF
OF THE
THE IMPLEMENTING
IMPLEMENTING RULES AND
AND REGULATIONS
REGULATIONS OFOF TITLE XIII OF
XIII OF
ACT no.
REPUBLIC ACT NO. 8424
8424 OTHERWISE
OTHERWISE KNOWN
KNOWN AS THE
THE "NATIONAL
"NATIONAL INTERNAL
INTERNAL
REVENUE
REVENUE CODE 1997", AS AMENDED BY REPUBLIC ACT no.
CODE OF 19sr1", N O . 11534
11534 ORTHE
"CORPORATE RECOVERY AND
"CORPORATE A N D TAX INCENTIVES
INCENTIVES FOR ENTERPRISES
ENTERPRISES (CREATE)
ACT"
ACT"

SECTION
SECTION 1. 1. Scope.
Scope. Pursuant
Pursuant to Section 21 21 of Republic
Republic Act No. 11534,
11534, entitled
entitled "AN ACT
REFORMING THE CORPORATE INCOME TAX AND INCENTIVES INCENTIVES SYSTEM, AMENDING
AMENDING FOR THE
PURPOSE SECTIONS 20, 20, 22,
2 2 , 25, 27, 28,
25, 27, 28, 29,
29, 34,
34, 40,
40, 57,
57, 109,
109, 116,
116, 204
204 AND 290
290 OF
OF THE
NATIONAL
NATIONAL INTERNAL REVENUE CODE OF 1997, 1997, AS AMENDED, AND CREATING THEREIN NEW NEW
TITLE XIII,
XIII, AND FOR OTHER PURPOSES," tthe h e Secretary of Finance
Finance and the Secretary of Trade
and Industry
Industry hereby promulgate
promulgate these
these amendments to the the CREATE
CREATE Implementing
Implementing Rules and
Regulations
Regulations (IRR).

SECTION 2. Rule 2,
SECTION 2. 2, Sections 4, 55 and 8
8 of the CREATE
CREATE IRR is hereby amended to read as follows:

RULE 2.
2 . Tax and
and Duty
Duty Incentives
Incentives

SECTION. 4. Customs
SECTION. 4. Customs Duty
Duty Exemption
Exemption on
on Importation
Importation of
of Capital
Capital Equipment,
Equipment,
Row
Raw Materials,
Materials, Spare Parts, or
Spare Parts, or Accessories.
Accessories. -— REGISTERED EXPORT AND AND
DOMESTIC
DOMESTIC MARKET ENTERPRISES SHALL ENJOY EXEMPTION
MARKET ENTERPRISES EXEMPTION FROM
CUSTOMS
CUSTOMS DUTIES
DUTIES ON ON THEIR
THEIR importation of
of capital equipment,
equipment, raw materials,
materials,
spare parts,
parts, and accessories
accessories FOR THEIR
THEIR REGISTERED PROJECT
PROJECT OR
OR ACTIVITY
ACTIVITY
FOR A MAXIMUM
MAXIMUM PERIOD PERIOD OF SEVENTEEN (17) YEARS AND
(17) YEARS AND TWELVE
TWELVE (12)
(12)
YEARS FROM
FROM THE
THE DATE
DATE OF REGISTRATION,
REGISTRATION, RESPECTIVELY, UNLESS
RESPECTIVELY,
OTHERWISE
OTHERWISE EXTENDED
EXTENDED UNDER THE SIPP;
UNDER THE SIPP; provided,
provided, that the following
following
conditions
conditions are complied
complied with:
with:

xxx.
XXX XXX XXX.

SECTION. 5.
SECTION. 5 . Value-added
Value-added Tax
Tax (VAT) zero-rating
zero-rating and
and exemption. -— The
The VAT
exemption
exemption on importation and VAT zero~ratin
zero-rating on local
local purchases shall
shall only
only
apply to goods and services directly
to goods directly and exclusively
exclusively used in the registered
in the
project or activity of a registered
registered export enterprise, FOR A MAXIMUM PERIOD PERIOD
OF SEVENTEEN (17)
OF (17) YEARS FROMFROM THETHE DATE
DATE OF REGISTRATION,
REGISTRATION, UNLESS
OTHERWISE EXTENDED
OTHERWISE EXTENDED UNDERUNDER THE THE SIPP.
SIPP.

The direct
direct and exclusive
exclusive use for the registered
registered project or
or activity refers to raw
refers to
materials, inventories,
inventories, supplies,
supplies, equipment,
equipment, goods,
goods, PACKAGING
PACKAGING MATERIALS,

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 SERVICES,
SERVICES,INCLUDING PROVISION OF BASIC
INCLUDING PROVISION UTILITIES, AND
INFRASTRUCTURE, UTILITIES,
BASIC INFRASTRUCTURE,
MAINTENANCE, REPAIR AND OVERHAUL
MAINTENANCE, REPAIR OVERHAUL OF EQUIPMENT, and
OF EQUIPMENT, other expenditures
and other
DIRECTLY
DIRECTLY ATTRIBUTABLE
A1TRIBUTABLE TO the project or activity
the registered project activity without
without which the
the
registered
registered project or activity
project or cannot be carried
activity cannot out; PROVIDED, THAT
carried out; THAT THE VATVAT
ZERO-RATING ON PURCHASES SHALL BE GRANTED UPON
ON LOCAL PURCHASES UPON THE
ENDORSEMENT OF THE CONCERNED CONCERNED IPA, IPA, ININ ADDITION
ADDITION TO THE
DOCUMENTARY REQUIREMENTS OF THE BIR.
DOCUMENTARY BIR.

SECTION 8. 8. Taxation after the

Taxation after the expiration
expiration of the period
of the period of of avoilment
availment of
of
-
incentives. - All registered
incentives. business enterprises shall
registered business shall pay all applicable taxes
at tthe under the
regular rates under
h e regular Code and
t h e Code other laws after the
and other t h e expiration of the
expiration of the
period of
period incentives of their
of incentives registered project or
their registered or activity, UNLESS OTHERWISE
activity, UNLESS
PROVIDED IN RULES.
THESE RULES.
IN THESE

SECTION 3.
SECTION 3, Section
Rule 3,
3. Rule the CREATE
Section 3 of the IRR is hereby amended to read as follows:
CREATE IRR follows:

SECTION 3.
SECTION 3. Qualified expansion, entirely
Qualified expansion, new project,
entirely new project, or existing registered
or existing registered
or activities.
projects or
projects activities.
xxx
Qualified expansion projects
Qualified o r activities defined under
projects or under Rule 1, Section 4(U),
1, Section 4(U),
may be granted three (3) YEARS
b e granted YEARS ITH ITH FOLLOWED BY THE ENHANCED
DEDUCTIONS OR SCIT, AS APPLICABLE. APPLICABLE. THE EXPANSION PROJECT OR
EXPANSION PROJECT
ENTITLEDTO
MAY ALSO BE ENTITLED
ACTIVITY MAY EXEMPTION, VAT
TO DUTY EXEMPTION, EXEMPTION ON
VAT EXEMPTION ON
IMPORTATION
IMPORTATION AND VATAND VAT ZERO RATING
RATING ON ON LOCAL PURCHASES
PURCHASES UNDER RULE
SECTIONS 4
2, SECTIONS
2, AND 5,
4 AND 5, RESPECTIVELY; Provided, that the application for tax
RESPECTIVELY; Provided,
qualified expansion
for a qualified
incentives for project or
expansion project or activity shall be
activity shall approved bythe
b e approved by the
concerned IPA,
or concerned
FIRB or the case may be,
IPA, as the be, based on amount of
the amount
on the of investment
investment
expansion project or
the expansion
capital of the under Rule
activity under
or activity 5, Section
Rule 5, Section 1.1.

SECTION 4.
SECTION Rule 17,
4. Rule CREATE IRR
h e CREATE
17, Section 2 of tthe follows:
IRR is hereby amended to read as follows:

17. Transitory
RULE 17. and Miscellaneous
Transitory and Miscellaneous Provisions
Provisions

SECTION 2.
SECTION Entitlement to
2. Entitlement duty exemption
to duty exemption on importation
on importation of capital
of capital
equipment,
equipment, row materials, spare
raw materials, parts or
spare parts -
accessories. — Existing RBEs
or accessories. RBEs with
Authority to
valid Certificate of Authority
valid Import (CAI) or
to Import Admission Entry whose capital
or Admission capital
equipment,
equipment, raw materials,
materials, spare parts or accessories were
or accessories were ordered,
ordered, as
reflected in
reflected the date of the
in the the purchase orderorder or the date of the
on the
or on the opening of of
the corresponding letters of credit;
the corresponding credit; or loaded, as reflected in
or loaded, in the bill of lading
the bill lading
date; oror are still in transit during
in transit of Executive Order 85,
the effectivity of
during the 85, Series of
2019, shall qualify
2019, qualify for duty exemption until
the duty
for the t h e expiration of the
until the the
CAI/Admission Entry.
CAI/Admission Entry.

SECTION 5. Rule
SECTION 5. 18, Section
Rule 18, t h e CREATE
Section 5 of the IRR is hereby
CREATE IRR amended and
hereby amended Section 6 is inserted
and Section
to read as follows:

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Page 2 of
 RULE 18.
18. Investments
Investments prior
prior to the effectivity
to the effectivity of
of the Act
the Act

SECTION s.
SECTION 5. Non-income
Non-income related tax incentives.
related tax -
incentives. — All registered
registered EXPORT
EXPORT ANDAND
DOMESTIC
DOMESTIC MARKET
MARKET enterprises that that will continue
continue to avail of their
their existing
existing tax
incentives subject
subject toto Sections 1, 2 and 3
Sections 1, 3 of this Rule,
Rule, may
m a y continue to enjoy
enjoy the
the
duty exemption, VAT VAT EXEMPTION
EXEMPTION ON ON IMPORTATION,
IMPORTATION, AND
A N D VAT
VAT ZERO-RATING
ZERO-RATING
ON
ON LOCAL PURCHASES AS PROVIDED PROVIDED IN THEIR RESPECTIVE IPA
I N THEIR
REGISTRATIONS; Provided,
REGISTRATIONS; Provided, that the DUTY DUTY EXEMPTION,
EXEMPTION, VAT-exemption
VAT-exemption on
on
importation,
importation, and
a n d VAT zero-rating on o n local purchases shall only
purchases shall only apply to goods
and services
services directly ATTRIBUTABLE
ATI'RI BUTABLE TO TO and exclusively
exclusively used
used in the
the registered
registered
project
project or
o r activity
activity OFOF SAID REGISTERED export enterprises
SAID REGISTERED enterprises LOCATED
LOCATED INSIDE
INSIDE
THE ECOZONESAND
THE ECOZONESAND FREEPORTS UNTILTHE EXPIRATION OFTHETRANSITORY
UNTILTHE EXPIRATION OF THE TRANSITORY
PERIOD;
PERIOD; PROVIDED,
PROVIDED, FURTHER,
FURTHER, THAT
THAT IMPORTATION
IMPORTATION OF CAPITAL
OF CAPITAL
EQUIPMENT,
EQUIPMENT, SPARE PARTS,
PARTS, AND AND ACCESSORIES
ACCESSORIES BY EXISTING EXISTING EXPORT
EXPORT
ENTERPRISES AND AND DOMESTIC
DOMESTIC MARKET
MARKET ENTERPRISES REGISTERED WITH WITH THETHE
BOI PRIOR TO
BOI PRIOR TO THE
THE EFFECTIVITY
EFFECTIVITY OF OF THE
THE ACT
ACT SHALL CONTINUE
CONTINUE TO TO BE SUBJECT
TO DUTY
TO DUTY EXEMPTION
EXEMPTION FOR
FOR A PERIOD
PERIOD OF OF FIVE
FIVE (5) YEARS FROM DATE OF
FROM DATE OF
REGISTRATION.
REGISTRATION.

SECTION
SECTION 6.6. TRANSITORY
TRANSITORY RULES FOR FOR OFFSHORE
OFFSHORE GAMING
GAMING IJCENSEES
LICENSEES AND AND
ACCREDITED PROVIDERS. -- NOTWITHSTANDING
ACCREDITED SERVICE PROVIDERS. NOTWITHSTANDING THE PROVISIONS
THE PROVISIONS
OF
OF REPUBLIC
REPUBLIC ACT ACT no.
NO. 11590,
11590, ANA N OFFSHORE
OFFSHORE GAMING
GAMING LICENSEE OR OR ANAN
ACCREDITED
ACCREDITED SERVICE PROVIDER
PROVIDER DEFINED
DEFINED UNDER SECTIONS 22
UNDER SECTIONS 22 Ill)
(II) AND
AND 2727
(GI OF THE CODE,
(G) OF THE CODE, AS AMENDED, DULY REGISTERED WITH, AND ENJOYING
AMENDED, DULY REGISTERED WITH, AND ENJOYING
INCENTIVES GRANTED BY A
INCENTIVES GRANTED ANN IPA
IPA UNDER
UNDER ITSITS CHARTER PRIORPRIOR TO TO THE
THE
EFFECTIVITY
EFFECTIVITY OF THIS ACT,
OF THIS ACT, SHALL CONTINUE
CONTINUE TO SAID INCENTIVES
TO ENJOY SAID INCENTIVES
UNTIL
UNTIL THE
THE EXPIRATION
EXPIRATION OF OF THE
THE TRANSITORY
TRANSITORY PERIOD
PERIOD IN
IN SECTION
SECTION 311 311 OFO F THE
THE
CODE,
CODE, AS IMPLEMENTED
IMPLEMENTED BY SECTIONS
SECTIONS 1, 1, 2.
2, AND
AND 3 OF THIS
3 OF THIS RULE, OR THE
OR THE
EXPIRY OFOF THE THE LICENSE OR OR ACCREDITATION
ACCREDITATION OF
OF THE
THE REGISTERED
ENTERPRISE,
ENTERPRISE, WHICHEVER
WHICHEVER COMES
COMES EARLIER; PROVIDED THAT, SAID OFFSHORE
PROVIDED THAT, OFFSHORE
GAMING
GAMING LICENSEES
LICENSEES AND A N D ACCREDITED
ACCREDITED SERVICE PROVIDERS
PROVIDERS SHALL
THEREAFTER BE SUBJECT
SUBJECT TO THE APPLICABLE TAXES
TO THE TAXES UNDER
UNDER REPUBLIC
REPUBLIC ACT ACT
no.
NO. 11590
11590 AND
AND ITS IMPLEMENTING
IMPLEMENTING RULES AND
AND REGULATIONS.
REGULATIONS.

SECTION
SECTION 6.6. Repealing
Repealing clause.
clause. All existing
existing rules and regulations or
o r parts thereof which
which are
inconsistent with
with the provisions
provisions of this IRR are hereby amended
amended accordingly.
accordingly.

SECTION
SECTION 7.
7. Effectfvity.
Effectivity. These
These Rules
Rules shall
shall take effect
effect immediately upon publication
publication in
in a
newspaper of general
general circulation. A.

RLOS G.
\RLOS G. DOMI
DOMirN i RAMON M. L
Secretary of Finance Secretary of Trade and Industry |
MV

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