Republic Act No. 11534 or the CREATE ACT was signed into law by the President on March 26, 2021, and takes effect on April 11, 2021.  The CREATE Act amends Republic Act No. 8424 of the National Internal revenue Code of 1997, as amended.

Some of the salient provisions of the law include the reduction of corporate income tax rate from 30% to 20% beginning July 1, 2020 for corporations with incomes PHP5 million and below, provided its assets do not exceed PHP100 million. Proprietary educational institutions and hospitals are also granted a reduced rate of income tax to 1% beginning July 1, 2020 until June 30, 2023. Certain medicines, medical supplies and vaccines are also given VAT exemption on their sale and importation. VAT-exempt persons are also granted a reduced rate of 1% percentage tax beginning July 1, 2020 until June 23, 2023. Incentives are likewise granted to critical exporters and domestic market enterprises, registered enterprises in areas recovering from armed conflicts or major disasters, enterprises relocating outside the National Capital Region and for specific types of reorganizations involving corporations.

CREATE ACT intends to help buoy the domestic economy from the impact of the COVID-19 Pandemic.

Click here to view the full law:  https://www.officialgazette.gov.ph/2021/03/26/republic-act-no-11534/