How to Apply for a Business Tax Incentive Under CREATE Law

• The CREATE Law gives businesses access to powerful tax incentives — but only if you follow the correct application process.
• In 2026, CREATE MORE updates make incentives more flexible, especially for exporters and innovation‑driven firms.
• All applications now go through the FIRMS portal, making the process more transparent and centralized.

The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law is one of the most important economic reforms in the Philippines. For entrepreneurs, it opens the door to tax holidays, reduced corporate income tax, and duty‑free importation of equipment — benefits that can dramatically reduce operating costs.

Whether you’re a small manufacturer, an IT startup, an exporter, or a business planning to expand, understanding how to apply for CREATE incentives can give you a major competitive advantage.

The single menu of incentives under CREATE

The incentives you can apply for depend on your industry and location, based on the Strategic Investment Priority Plan (SIPP). These incentives are designed to support industries that strengthen national competitiveness.

Income Tax Holiday (ITH)

Businesses may enjoy 4 to 7 years of zero percent income tax, depending on their SIPP tier and location.

Enhanced Deductions (ED)

After the ITH period, companies may shift to a 20% corporate income tax rate (under CREATE MORE) with enhanced deductions such as:

• 100% additional deduction on power expenses
• 150% additional deduction on labor expenses
• 200% additional deduction on research and development

These deductions significantly reduce taxable income, making operations more cost‑efficient.

Special Corporate Income Tax (SCIT)

A flat 5% tax on gross income earned, in lieu of all national and local taxes. This is typically chosen by export‑oriented firms inside economic zones.

Duty and VAT perks

CREATE allows:

• Duty‑free importation of capital equipment
• VAT zero‑rating on local purchases

In 2026, the rules now explicitly include janitorial, security, and administrative services as VAT zero‑rated for registered enterprises.

Step-by-step application process

Applying for CREATE incentives is now more streamlined thanks to the Fiscal Incentives Registration and Monitoring System (FIRMS). Here’s the full roadmap.

Step 1: Check your eligibility under the SIPP

The 2025–2028 SIPP categorizes industries into three tiers:

• Tier 1: Basic needs, healthcare, agriculture, and infrastructure
• Tier 2: Industrial value chain gaps (defense, food security, logistics)
• Tier 3: High‑tech, AI, robotics, digital industries, and innovation‑driven projects

Your tier determines the length of your incentives and the type of benefits you can apply for.

Step 2: Choose your Investment Promotion Agency (IPA)

Your IPA depends on your business model and location:

• BOI (Board of Investments): For domestic or export projects anywhere in the Philippines
• PEZA (Philippine Economic Zone Authority): For export‑oriented firms inside ecozones
• CDC (Clark), SBMA (Subic), AFAB (Bataan): For locators inside their respective zones

Each IPA has its own guidelines, but all follow the CREATE framework.

Step 3: Register via FIRMS

All CREATE applications are now centralized through the FIRMS portal.

• Create an account on the FIRB website
• Fill out the online application form
• Upload required documents

Typical requirements include:

• DTI or SEC registration
• Five‑year project study with financial projections
• Proof of land ownership or lease contract
• Environmental compliance documents (if applicable)

Your IPA will review your application. For small and medium projects, approval usually takes 30–60 days.

Step 4: FIRB approval for large projects

If your investment exceeds ₱15 billion (adjusted under CREATE MORE), your application will be forwarded to the Fiscal Incentives Review Board (FIRB) for final approval.

Large projects undergo additional evaluation to ensure national strategic value.

Critical updates under CREATE MORE (2026)

CREATE MORE introduced several improvements to make incentives more flexible and business‑friendly.

Immediate availment of SCIT or Enhanced Deductions

Businesses may now skip the Income Tax Holiday and immediately choose:

• 5% SCIT, or
• Enhanced Deductions

This is ideal for companies that prefer long‑term stability over temporary tax holidays.

Work-from-home allowance for RBEs

Registered Business Enterprises (RBEs) may now allow up to 50% of their workforce to work from home without losing incentives. This is a major shift from earlier restrictions.

Local tax clarity

The 5% SCIT is now explicitly “in lieu of all local taxes,” preventing LGUs from imposing additional fees on registered firms.

Summary table: application roadmap

Conclusion and action plan

Applying for CREATE incentives can significantly reduce your tax burden and improve your competitiveness. Whether you’re a small manufacturer, a tech startup, or an export‑oriented enterprise, the CREATE Law provides a clear pathway to long‑term savings and growth.

To get started:

• Check if your business aligns with the SIPP
• Choose the right IPA (BOI, PEZA, or others)
• Prepare your project study and documents
• Submit your application through FIRMS
• Comply with annual reporting to maintain your incentives

With the right preparation, CREATE incentives can help you scale faster, reduce costs, and compete more effectively in both local and global markets.