The Philippine government has lately overhauled its fiscal regime to lure foreign capital. With the signing of the CREATE MORE Act, businesses can now avail of competitive benefits that match neighboring Southeast Asian nations.
Understanding the New Tax Structure
One of the major benefit of the 2026 tax code is the cut of the Income Tax rate. Qualified corporations utilizing the Enhanced Deductions Regime (EDR) are currently entitled to a reduced rate of twenty percent, down from the previous 25%.
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Furthermore, the duration of tax availment has been extended. Large-scale investments can nowadays profit from tax holidays and incentives for up to twenty-seven years, offering lasting predictability for large entities.
Notable Incentives for Modern Corporations
According to the latest laws, corporations operating in the country can access several impactful advantages:
100% Power Expense Deduction: Energy-intensive firms can now deduct 100% of their electricity expenses, vastly lowering overhead tax incentives for corporations philippines burdens.
Value Added Tax Benefits: The requirements for VAT zero-rating on domestic procurement have been simplified. Benefits now apply to items and services that are necessary to the business project.
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Duty-Free Importation: Registered firms can bring in capital equipment, raw materials, tax incentives for corporations philippines and spare parts without imposing customs duties.
Hybrid Work Support: Notably, BPOs operating in ecozones can now adopt hybrid models without risking their fiscal eligibility.
Simplified Local Taxation
To boost the business climate, the Philippines has introduced the Registered Business Enterprise Local Tax. In lieu of paying diverse local fees, qualified enterprises may pay a single tax of not more than two percent of their earnings. Such a move reduces red tape and tax incentives for corporations philippines renders reporting much simpler for corporate entities.
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Why to Register for These Incentives
For a company to apply for these corporate incentives, businesses must register with an tax incentives for corporations philippines Investment Promotion Agency (IPA), such as:
PEZA – Ideal for export-oriented businesses.
BOI – Perfect for local industry enterprises.
Specific Regional Agencies: Such as the SBMA or Clark Development Corporation (CDC).
In conclusion, the tax incentives for corporations tax incentives for corporations philippines in the Philippines offer a world-class framework intended to promote growth. Whether you are a technology startup or a massive manufacturing plant, navigating these laws is essential for maximizing your bottom line in 2026.