5 important things to know about the CREATE MORE Law

One notable provision of the law is it allows BPOs to deploy 50% of its workforce to work remotely.

The CREATE MORE Law, officially Republic Act (RA) No. 12066, stands for Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy.

It was signed into law on November 11, 2024, in the Philippines.

Government agencies have already signed the implementing rules and regulations (IRR) of the law which is expected to clarify and refine the provisions for the law’s smooth implementation.

This law is a significant update to the previous CREATE Act and aims to make the Philippines a more attractive destination for businesses

Here are 5 important things to know about this new law:

50% work-from-home for BPOs: CREATE MORE formalizes the work-from-home trend for business process outsourcing (BPO) companies operating within economic zones and freeports, allowing up to 50% of their workforce to work remotely. This balances the benefits of remote work with the need to support the office space market. By including this provision in the law, CREATE MORE essentially formalizes the work-from-home trend within the BPO sector in the Philippines. This provides more clarity and stability for companies and employees.

Enhanced tax incentives: The law offers a more competitive and predictable tax incentives regime, designed to attract investment and make the Philippines a more desirable business destination. This includes extended incentive periods, especially for high-value projects.

Lower corporate income tax: CREATE MORE reduces the corporate income tax rate for certain registered business enterprises, further sweetening the deal for companies looking to invest in the Philippines.

Simplified VAT rules: The law simplifies VAT rules, shifting from “direct and exclusive use” to “directly attributable” requirements for goods and services to avail of VAT incentives. This makes it easier for businesses to understand and comply with the regulations.

Increased deductions: CREATE MORE allows for increased deductions on certain expenses, such as power expenses, helping businesses to reduce their operational costs.

Proponents said the CREATE MORE Law is a crucial step in driving investment and economic recovery in the Philippines. It aims to boost the country’s competitiveness by offering a more favorable tax environment and encouraging businesses to invest and create jobs.

It’s important to remember that this is specifically mentioned for BPOs operating within economic zones and freeports. The law may have different provisions for other types of businesses.