CREATE MORE Act Incentives: Enhanced Deductions and Tax Breaks for RBEs
The CREATE MORE Act, Republic Act No. 12066, gives Registered Business Enterprises (RBEs) a reduced 20% corporate income tax rate on registered activities under the Enhanced Deductions Regime, along with faster access to incentives and richer deductions than the original CREATE Act allowed. Signed into law on November 11, 2024, it amends RA No. 11534 (the CREATE Act) to broaden tax incentives for enterprises registered with Investment Promotion Agencies (IPAs).
Keep Your Withholding Certificates in Order FREE →What income-tax incentives does CREATE MORE add for RBEs? #
CREATE MORE’s core income-tax change is a 20% Corporate Income Tax (CIT) rate for RBEs availing of the Enhanced Deductions Regime (EDR) on income from their registered project or activity — a meaningful cut from the standard 25% CIT rate that would otherwise apply. This sits alongside the existing Special Corporate Income Tax (SCIT) option, which taxes gross income at a preferential rate in lieu of all national and local taxes.
- 20% CIT rate on registered-activity income for RBEs under the Enhanced Deductions Regime.
- 100% additional deduction for power expenses used in the registered project or activity — up from 50% under the original CREATE Act.
- New deductible items for trade fair and exhibition expenses, supporting RBEs expanding into new export markets.
- Extended Net Operating Loss Carry-Over (NOLCO): losses incurred during the Income Tax Holiday (ITH) period can now be carried over as a deduction for 5 consecutive taxable years following the last year of the ITH period, rather than counting from the year the loss occurred.
Does an RBE still have to go through an Income Tax Holiday first? #
No — this is one of the more practical changes. Under the original CREATE Act, an RBE had to avail of the Income Tax Holiday (ITH) before it could later shift into SCIT or Enhanced Deductions. Under CREATE MORE, an RBE may elect SCIT or Enhanced Deductions outright, from the very first year of commercial operations, without passing through ITH first. That flexibility lets a newer enterprise choose whichever regime better fits its actual cost structure from day one, instead of defaulting into a sequence that may not suit a capital-light or service-oriented business.
What is the RBE Local Tax, and why does it matter? #
RBEs enjoying ITH or Enhanced Deductions are subject to an RBE Local Tax (RBELT) capped at 2% of gross income, paid in lieu of all other local government taxes and fees, for as long as the ITH or EDR period lasts. This caps what can otherwise be an unpredictable patchwork of local government unit (LGU) taxes, business permits, and fees into one predictable, capped local levy — a meaningful compliance simplification for RBEs operating across multiple LGUs.
| Original CREATE Act | CREATE MORE Act (RA No. 12066) | |
|---|---|---|
| SCIT/ED availment | Only after completing ITH | Outright from year one of operations |
| Power expense deduction | 50% additional deduction | 100% additional deduction |
| CIT rate under Enhanced Deductions | 25% (standard rate) | 20% |
| NOLCO carryover (losses during ITH) | 5 years from year loss incurred | 5 years from the last year of ITH |
| Local taxes during ITH/EDR | Varied by LGU | Capped RBE Local Tax up to 2% of gross income |
This post covers the income-tax side of CREATE MORE. For the VAT treatment of an RBE’s local sales — a related but distinct question — see RR No. 1-2026: VAT on Local Sales by Registered Business Enterprises.
A worked example #
An export-oriented electronics assembler registers as an RBE and elects the Enhanced Deductions Regime outright in its first year of commercial operations — skipping the ITH-first sequence required under the old CREATE Act. Its registered-activity income is taxed at the 20% CIT rate rather than the standard 25%, it deducts 100% of its power expenses for the assembly line (rather than 50%), and it pays RBE Local Tax capped at 2% of gross income instead of a mix of separate LGU business taxes and fees. If the assembler shows a net operating loss in its first EDR year, that loss carries forward as a deduction against income for 5 years following the last year of any ITH period it may separately hold on other registered lines.
Summary #
CREATE MORE Act (RA No. 12066) sharpens the incentives available to Registered Business Enterprises: a 20% CIT rate under Enhanced Deductions, outright SCIT/ED election without a mandatory ITH-first sequence, a 100% power expense deduction, and a capped RBE Local Tax. See BIR Form 2307 Guide: EOPT Act and CREATE MORE Updates for 2026 for how CREATE MORE intersects with withholding obligations, and Minimum Corporate Income Tax (MCIT) for how the regular corporate income tax floor applies to enterprises outside these incentive regimes.