RMC No. 42-2026: The Certificate of Entitlement to Tax Incentives Is Still Required With Your AITR

Yes — the Certificate of Entitlement to Tax Incentives (CETI) is still a mandatory attachment to the Annual Income Tax Return (AITR) for a Registered Business Enterprise (RBE) claiming income tax incentives. RMC No. 42-2026 clarifies that RMC No. 20-2026 did not repeal, amend, or waive this requirement — the CETI simply did not appear in RMC No. 20-2026’s illustrative attachment list, and the BIR issued RMC No. 42-2026 specifically to correct the confusion that omission caused among RBEs and their preparers.

What is RMC No. 42-2026 and why was it issued? #

RMC No. 42-2026 is a Revenue Memorandum Circular clarifying that the Certificate of Entitlement to Tax Incentives (CETI) remains a mandatory AITR attachment for RBEs availing of income tax incentives under the CREATE Act (Republic Act No. 11534) as amended by the CREATE MORE Act (Republic Act No. 12066). The BIR issued it after RBEs and tax preparers began treating the CETI as optional, because it was left off the illustrative attachment list in an earlier circular, RMC No. 20-2026.

• The circular was signed April 20, 2026 and circulated by the BIR on May 7, 2026, per the official BIR Digest of the issuance.
• It addresses one specific point of confusion: whether RMC No. 20-2026’s attachment list silently dropped the CETI requirement.
• It does not create a new requirement — it reaffirms an existing one that traces back to CREATE and CREATE MORE’s implementing rules.

The BIR’s own digest of the circular states the clarification directly. The title line of the official BIR Digest of RMC No. 42-2026, published at bir-cdn.bir.gov.ph, reads:

“REVENUE MEMORANDUM CIRCULAR NO. 42-2026 issued on May 7, 2026 clarifies the submission of the Certificate of Entitlement to Tax Incentives (CETI) as attachment to the Annual Income Tax Return (AITR) of Registered Business Enterprise (RBE).”

What exactly did RMC No. 20-2026 leave out, and why did it cause confusion? #

RMC No. 20-2026 published an illustrative list of documents that generally accompany an Annual Income Tax Return, and the CETI was not on that list. Some RBEs and preparers read that omission as the BIR quietly dropping the requirement, and stopped attaching the CETI to their AITR filings as a result.

• RMC No. 20-2026’s list was illustrative of common AITR attachments generally, not an exhaustive or RBE-specific checklist.
• Leaving an item off an illustrative list is not the same as revoking the underlying legal requirement for it.
• RMC No. 42-2026 states plainly that RMC No. 20-2026 did not amend or repeal the CETI attachment requirement — the omission was not a substantive change in BIR policy.

Who issues the CETI, and which RBEs need it? #

The CETI is issued by the Investment Promotion Agency (IPA) that registered the enterprise — PEZA, the Board of Investments (BOI), and other CREATE-recognized IPAs each issue their own CETI to the RBEs under their administration. Any RBE claiming an Income Tax Holiday (ITH), the Special Corporate Income Tax (SCIT) rate, or the Enhanced Deductions Regime (EDR) under CREATE or CREATE MORE needs a CETI covering the taxable year to substantiate that claim on its AITR.

Without a current CETI attached, an RBE’s income tax incentive claim on the AITR lacks the documentary proof the BIR expects to see, which is exactly the gap RMC No. 42-2026 is designed to close before it becomes an audit issue. For the broader menu of CREATE MORE incentives an RBE might be claiming alongside the CETI, see CREATE MORE Act Incentives for RBEs.

Worked example: a PEZA-registered manufacturer filing BIR Form 1702-RT #

Assume a PEZA-registered electronics manufacturer is an RBE availing of the Income Tax Holiday on its registered manufacturing activity under CREATE. For taxable year 2025, the company files BIR Form 1702-RT (the annual income tax return for corporations subject to the regular rate or a preferential/special rate) to report its registered and non-registered activity income separately.

1. The company secures its CETI from PEZA for taxable year 2025, confirming its ITH entitlement and the specific registered activity covered.
2. It prepares BIR Form 1702-RT, allocating gross income and deductions between the ITH-covered registered activity and any other taxable activity.
3. It compiles its AITR attachment package: CPA-audited financial statements with the Statement of Management’s Responsibility, the SAWT and BIR Form 2307 certificates for any creditable withholding tax claimed, and — per RMC No. 42-2026 — the PEZA-issued CETI for the year.
4. It submits the complete package through the BIR’s eAFS facility alongside the electronically filed BIR Form 1702-RT.

If the company omits the CETI on the theory that RMC No. 20-2026 no longer requires it, RMC No. 42-2026 makes clear that assumption is wrong — the ITH claim on the return is unsubstantiated without it, incentive documentation or not. For the fuller corporate attachment checklist this worked example draws from, see BIR Form 1702 Attachments; for how the underlying incentive math works, see How to Compute the CREATE MORE Enhanced Deduction for Power Expense.

What should an RBE do differently after RMC No. 42-2026? #

Nothing changes procedurally for an RBE that was already attaching its CETI — RMC No. 42-2026 confirms existing practice rather than adding a new step. RBEs that stopped attaching the CETI after RMC No. 20-2026, or that were unsure whether it was still needed, should resume treating it as a standard, non-negotiable AITR attachment going forward.

• Continue securing a current-year CETI from the relevant IPA before filing the AITR.
• Include the CETI in the AITR attachment package submitted through eAFS, alongside audited financial statements and other required documents.
• Do not treat a circular’s illustrative attachment list as an exhaustive statement of every document a specific taxpayer type must submit — RBE-specific requirements can sit outside a general list.
• If a prior-year AITR was filed without the CETI on the assumption it was no longer required, coordinate with the RDO or a tax professional on whether supplemental submission is needed.

Summary #

RMC No. 42-2026 exists to close a documentation gap that opened only because the CETI was missing from an illustrative list in RMC No. 20-2026 — not because the BIR changed its policy on RBE incentive substantiation. The Certificate of Entitlement to Tax Incentives, issued by an RBE’s Investment Promotion Agency under the CREATE Act and CREATE MORE Act, remains a mandatory attachment to the Annual Income Tax Return for any RBE claiming Income Tax Holiday, Special Corporate Income Tax, or Enhanced Deductions Regime benefits. RBEs and preparers should keep attaching a current CETI to every AITR that reports an income tax incentive claim, regardless of whether a given circular’s illustrative list happens to spell that out.