BOI and PEZA registration and project eligibility
CREATE MORE incentives should be assessed against the proposed Philippine project before costs and contracts are fixed. Registration, the selected income tax package, and entitlement to VAT or customs benefits require separate checks. Connect the legal conditions to the project’s activities, location, expected results, and supporting records.
Tax incentives can affect a Philippine project’s cost and timing. Whether the project pursues BOI registration or PEZA registration, eligibility depends on the activity to be registered, the enterprise classification, the location, and the applicable approval conditions. Incorporating a company does not automatically entitle it to incentives; the grant relates to its approved registered project or activity.[1]
Begin the assessment while structuring the project. Equipment purchases, the commercial start date, customer base, and proposed site can affect the application. Contracts should allow for the approvals on which the business plan depends.
Assessing the project under the current SIPP
The Strategic Investment Priority Plan (SIPP) identifies priority activities that may qualify for tax incentives. Memorandum Order No. 47, dated 21 May 2026, approved the 2026 SIPP. Assess the project against this plan and the applicable general policies, specific guidelines, and transitional issuances.[2]
A broad description such as technology, manufacturing, or logistics does not establish eligibility. The project’s actual functions, outputs, investment, and proposed commitments must fit the relevant coverage and conditions.
The tax incentives definition of a registered export enterprise generally requires at least 70 percent of production or output to be exported directly or through qualifying sales to another registered export enterprise for its final exports.
An export test under another investment law does not automatically establish this classification.[3]
Prepare a project description explaining the products or services, production process, proposed customers, site, and investment. Identify which parts of the operation are included in the application. An assessment of CREATE MORE incentives should begin with that defined project rather than the company’s broad commercial objectives.
Match the proposed activity with the applicable SIPP coverage and conditions. Keep a record of the provision and guidance relied upon, including any qualification that remains unresolved. A business plan should distinguish an activity that appears eligible from a project whose registration and incentive terms have actually been approved.
For an export proposal, identify the expected sales channels and the records that will demonstrate qualifying exports. Review the role of any customer whose own exports are being relied upon. Confirm the relevant classification before using an exporter’s incentive package in the project’s financial model.
Read the 2026 SIPP approval alongside the current general policies, specific guidelines, and transitional instructions. CREATE MORE incentives depend on the applicable conditions, so record the guidance used and revisit the assessment if the proposed activity or customer base changes.
Comparing income tax packages before election
CREATE MORE, or Republic Act No. 12066, amended the Tax Code’s incentives for registered business enterprises (RBEs). The principal income tax regimes have different tax bases and eligibility rules.[4]
| Regime | Main feature | Key limit |
| Income Tax Holiday (ITH) | Income tax exemption on the registered project or activity for the approved period. | Generally 4–7 years for qualifying new projects; other taxes can remain. |
| Special Corporate Income Tax (SCIT) | 5% of statutory gross income earned, in lieu of national and local taxes and local fees and charges. | For qualifying registered export enterprises. SCIT and EDR cannot be used together. |
| Enhanced Deductions Regime (EDR) | Additional qualifying deductions. Corporate RBEs pay 20% on taxable income from registered projects or activities. | Available to export and domestic market enterprises; deductions require substantiation. |
The entitlement period depends on location, industry tier, and approving body. Eligible exporters may elect SCIT or EDR from the start of commercial operations instead of ITH; domestic market enterprises may elect EDR.
The chosen package is irrevocable for the entitlement period. Model expected profits and eligible costs before making the election.[5]
When comparing CREATE MORE incentives, model the expected tax payable under each eligible regime using its own tax base. The SCIT percentage applies to statutory gross income earned, while the EDR corporate rate applies to taxable income from registered operations. The lower percentage alone does not establish the better commercial result, because the amounts to which the rates apply differ.
Prepare projections showing expected revenue, qualifying expenses, capital expenditure, and the timing of profits. Test how the comparison changes if sales begin later or costs differ from the forecast. CREATE MORE incentives should be assessed over the approved entitlement period, with assumptions that management and its advisers can explain.
Identify which planned costs may support enhanced deductions and what evidence will be needed. Do not treat every business expense as an additional deduction merely because the enterprise is registered. The model should distinguish ordinary costs from expenses that satisfy the conditions of a particular enhanced deduction.
Use the CREATE MORE Act and its implementing rules when comparing the available packages. Document the proposed election and the basis for choosing it before submission, so the approved registration terms and the financial assumptions reflect the same project.
BOI registration or PEZA registration?
The Board of Investments (BOI) and Philippine Economic Zone Authority (PEZA) are investment promotion agencies (IPAs) with distinct mandates, registration processes, and location requirements.
BOI registration generally accommodates qualifying projects beyond designated economic zones. PEZA projects must fit its authorized activities and applicable economic zone arrangements. Review the proposed site before making a lease or construction commitment unconditional.[6]
Project registration remains with the IPA. For the grant of incentives, the statutory baseline is PHP15 billion: the IPA approves projects at or below that amount, while the Fiscal Incentives Review Board (FIRB) approves larger projects upon IPA recommendation, subject to any valid threshold adjustment.[7]
Compare the proposed activity and site with each agency’s registration requirements before settling the application route. Identify the permissions, documents, and project commitments involved. CREATE MORE incentives do not remove the need to assess whether the chosen agency can register the actual operation at its intended location.
Review the lease, development schedule, and access to necessary facilities alongside the registration plan. Identify the approvals on which the project depends and reflect them in the commercial arrangements. Agree how delays or unmet conditions will affect deposits, equipment delivery, construction obligations, and the proposed commencement date.
Identify the agency that registers the project and the authority that can grant CREATE MORE incentives. Confirm the applicable approval threshold and supporting investment figures before fixing the process and timetable. Keep the final registration documents and incentive approval together so the business can identify the scope and conditions of both.
Include the costs of registration, record keeping, professional support, and maintaining the selected location when comparing packages. A tax saving may be outweighed by a location or operating commitment the business cannot sustain. Keep these costs visible alongside the projected incentive benefit.
VAT zero-rating, import VAT exemption, and customs relief
Under Title XIII of the Tax Code, import VAT exemption and VAT zero-rating on local purchases are generally for registered export enterprises and qualifying high-value domestic market enterprises.
The goods or services must be directly attributable to the registered project or activity. Check the applicable prior-year export or investment tests before claiming a benefit.[8]
Customs duty exemption has separate conditions, including required prior IPA approval and tests on the local availability of comparable goods. Confirm the VAT zero-rating certificate, import authorizations, and supporting supplier or customs records needed before availing of the benefit.[9]
Prepare a schedule of expected purchases and imports, identifying the goods or services, their actual use, and the registered project to which they relate. Review each proposed benefit under its own conditions. CREATE MORE incentives should not be treated as a blanket exemption for everything purchased by the company.
For local purchases, confirm the certification and supplier documents required for VAT zero-rating before agreeing on the price or issuing the invoice. Identify who will obtain the certificate and communicate the approved information to the supplier. Resolve uncertainty over the treatment before assuming that a quotation or invoice can use zero VAT.
Set responsibilities in the purchase contract for providing tax documentation, correcting an invoice, and addressing a change in the assumed treatment. Confirm which party bears the tax or other cost if a benefit is unavailable. Contract wording should follow the assessed entitlement and agreed allocation of commercial risk.
For imports, coordinate the registration details, required prior approvals, goods descriptions, and supporting customs records before shipment. Review the local availability conditions where applicable. The purchasing and logistics teams should know which documents must be available and who will confirm that the proposed import meets the requirements.
Record the conditions supporting the claim and monitor the relevant export or investment tests. If the business changes its sales mix, reassess the resulting entitlement. An earlier benefit or another project’s approval does not establish that a later purchase or shipment qualifies on the same facts.
Documenting claims for CREATE MORE incentives
Maintain records separating each registered project’s revenues, costs, and results from other operations. Monitor investment, employment, export, and operating commitments. Include annual applications for a Certificate of Entitlement to Tax Incentives (CETI) and annual tax incentives and benefits reports in the compliance schedule.[10]
For EDR claims, DOF Department Order No. 026-2026 adds substantiation requirements, including a notarized comprehensive summary report. Its transitional provision makes the stricter requirements mandatory beginning with the taxable year ending 31 December 2026 and thereafter. Prepare the supporting records during the year.[11]
Design the accounting records to identify each registered project and distinguish its transactions from other operations. Agree how shared costs will be identified and supported under the applicable rules. CREATE MORE incentives should be reflected in records that connect the claim with the approved activity and the expenditure actually incurred.
For EDR claims, identify the deduction category, expense, relevant period, and supporting evidence before preparing the return. Assign responsibility for checking that the documentation meets the applicable conditions. Reconcile the claimed amounts with the project’s books and explain any allocation rather than relying only on a general expense description.
Review DOF Department Order No. 026-2026 as circulated by the FIRB when planning EDR substantiation and the notarized comprehensive summary report. Set an internal timetable for gathering records, reviewing computations, obtaining required approvals, and preparing the report with the people responsible for the registered project.
Maintain a compliance calendar covering the CETI application, tax filings, incentive reports, and the project’s specific commitments. Identify a preparer and reviewer for each task and retain filing evidence. Review the calendar when agency guidance changes, rather than assuming that a previous year’s procedure remains sufficient.
Reviewing changes and existing registrations
Before expanding, relocating, changing the product, or restructuring, review whether the registration terms require approval or amendment. Existing registrations also need assessment under the applicable transitional rules. Include compliance costs when comparing packages.[12]
Bring proposed changes to the legal, finance, and registration advisers before implementation. Describe what will change in the activity, location, capacity, or ownership arrangements and compare it with the approved terms. CREATE MORE incentives should be reassessed against the revised facts before the company relies on the same treatment.
For an existing registration, obtain the original approval, amendments, incentive history, and documents supporting any transfer or transition. Identify the applicable rules and remaining entitlement before comparing a new package. A general description of the current law does not establish what a particular legacy registration may continue to enjoy.
Keep operational managers informed of the commitments made in the application. Review actual investment, employment, exports, and operating arrangements against those commitments. Where a requirement may not be met, identify the available action and seek the necessary guidance or approval before presenting the business as continuing to satisfy it.
Coordinating approval with a project commitment
Consider a manufacturer comparing a site outside an economic zone with a proposed PEZA location. The company expects export sales but has not confirmed the qualifying customer arrangements. It is also preparing equipment orders and a lease based on the assumption that the projected incentive package will be available.
First assess the activity, site, and export classification, then compare the available packages using the project’s expected profits and qualifying costs. CREATE MORE incentives should enter the model with their conditions identified. Mark unresolved approvals and assumptions clearly before the board approves the investment or authorizes material commitments.
Coordinate the registration timetable with the lease, construction plan, and equipment orders. Allocate responsibility for certifications, import approvals, and continuing records. The resulting project plan should show what must be confirmed before each commitment, what evidence will support the claims, and who will monitor the conditions after operations begin.
Retain the assessment with the final registration and contractual documents. If the approved scope or package differs from the original assumptions, update the model and commitments before implementation. This gives management a consistent basis for deciding whether the project remains commercially viable under the terms actually available.
When seeking financing, specify which CREATE MORE incentives the project has applied for and which have been approved. Distinguish an initial eligibility assessment from an approved registration and from a benefit supported for a particular period. Keep the lender’s assumptions aligned with the documents that the company can actually produce.
Common questions about CREATE MORE incentives
Registration and entitlement to incentives
SEC incorporation does not itself grant investment incentives. Eligibility and approval relate to the registered project or activity, its classification, and applicable conditions. Confirm the registration and incentive terms before treating a projected benefit as available.
The export enterprise classification
The tax incentives definition generally requires at least 70 percent of production or output to meet the qualifying direct or indirect export arrangements. Assess the actual sales channels and customer relationships; another investment law’s export test does not automatically establish this classification.
Comparing the SCIT and EDR percentages
SCIT uses 5 percent of statutory gross income earned. Corporate RBEs under EDR pay 20 percent on taxable income from registered projects or activities. Compare the tax bases and qualifying deductions, rather than choosing solely by the percentage.
Changing the elected package
The chosen incentive package is irrevocable for the entitlement period. Eligible exporters and domestic market enterprises have different options, and SCIT cannot be combined with EDR. Review the projected results and legal conditions before making the election.
Choosing BOI or PEZA
Assess the actual activity and proposed site against each agency’s mandate and requirements. BOI generally accommodates qualifying projects beyond designated economic zones, while PEZA registration depends on its authorized activities and applicable economic zone arrangements.
VAT and customs benefits after registration
After registration, assess VAT zero-rating, import VAT exemption, and customs duty exemption separately. For each claim, verify the enterprise category, eligible goods or services, applicable tests, and any required certificates or prior approvals. Keep the records linking the transaction to the registered project.
The new EDR substantiation requirements
DOF Department Order No. 026-2026 requires supporting evidence and a notarized comprehensive summary report. Its stricter requirements become mandatory beginning with the taxable year ending 31 December 2026 and thereafter. Prepare the records during the year.
Annual compliance for income tax incentives
Include the annual CETI application and tax incentives and benefits reports in the compliance calendar. Monitor the project’s commitments and keep supporting records. Receipt of an original incentive approval does not complete the enterprise’s continuing compliance tasks.
Existing registrations under transitional rules
Review the original registration, amendments, incentive history, and applicable transitional provisions. Assess any transfer or new election against the specific requirements. The incentives described for a new project do not automatically replace the terms of an existing registration.
Legal support for investment registration and incentives
ATL Law Firm advises businesses on eligibility for CREATE MORE incentives, investment registration, and the contracts and corporate arrangements that support the proposed project.
[1] Republic Act No. 12066 § 15 (Nov. 8, 2024) (Phil.) (amending National Internal Revenue Code, § 292); Department of Finance & Department of Trade and Industry, Implementing Rules and Regulations of Title XIII of the National Internal Revenue Code as Amended by Republic Act No. 12066 [hereinafter IRR], r. 1, § 3 (Feb. 17, 2025).
[2] Memorandum Order No. 47, s. 2026 (May 21, 2026), approving the 2026 Strategic Investment Priority Plan; IRR, r. 4, §§ 8–9.
[3] IRR, r. 1, § 4(n).
[4] Republic Act No. 12066 §§ 1–2, 17, 20–21 (amending National Internal Revenue Code, §§ 27(A), 28(A)(1), 294, 296, 296-A); IRR, r. 2, § 1.
[5] Republic Act No. 12066 §§ 18, 20–21; IRR, r. 3, §§ 1–3.
[6] Omnibus Investments Code of 1987, Executive Order No. 226 art. 7(3) (1987), as amended; Special Economic Zone Act of 1995, Republic Act No. 7916 § 13(b) (1995), as amended.
[7] Republic Act No. 12066 § 22 (amending National Internal Revenue Code, § 297(B)); IRR, r. 5, §§ 1–2.
[8] Republic Act No. 12066 §§ 16, 18 (amending National Internal Revenue Code, §§ 293(D), 295(D)); IRR, r. 9, §§ 1–3.
[9] Republic Act No. 12066 § 18 (amending National Internal Revenue Code, § 295(C)); IRR, rr. 9–10.
[10] IRR, r. 8, §§ 1–3, 7; r. 12, § 2.
[11] Department of Finance, Department Order No. 026-2026 § 12 (July 9, 2026), circulated through FIRB Advisory No. 010-2026.
[12] Republic Act No. 12066 § 31; IRR, r. 7, §§ 1–4; rr. 18–19.
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