THE Bureau of Internal Revenue (BIR) has released revenue regulations (RR) to implement reduced corporate income tax rates and value-added tax (VAT) procedures for registered business enterprises under the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act.
The BIR released RR 007-2025 outlining the rules, which serve effectively as the law’s Implementing Rules and Regulations (IRR).
President Ferdinand R. Marcos, Jr. on Nov. 28, signed CREATE MORE into law, reducing the corporate income tax for registered business enterprises (RBEs).
Corporate income tax rates for domestic and foreign corporations classified as RBEs opting for the Enhanced Deductions Regime (EDR) were reduced to 20%.
Domestic and resident foreign corporations, in general, are taxed 25%, but those small domestic corporations with net taxable income not exceeding P5 million and total assets not exceeding P100 million are subjected to 20% corporate income tax.
In addition, taxpayers can now deduct input tax on VAT-exempt sales from their gross income under Section 34(C)(8) of the Tax Code.
In a separate regulation 009-2025, the BIR clarified the VAT treatment of domestic sales made by RBEs that are subjected to 12% VAT, unless exempt or zero-rated.
“The liability to pay and remit the VAT to the government rests with the buyer of the goods or services. Republic Act 12066 has shifted to the buyer this liability for local sales of RBEs,” the BIR said.
But the RBE-seller must collect and remit VAT when the buyer is not engaged in business.
The regulations also implemented no-location-based exemptions, with local sales within freeports, ecozones, or customs territories subject to VAT.
Revenue Regulations 010-2025 was also issued to update VAT rules.
These regulations clarify VAT zero-rating for goods or properties including export sales and transactions with qualified RBEs.
Under Section 5, the VAT-exempt transactions include “imports of fuel, goods, and supplies for international shipping and air transport operations.”
The regulations also laid out procedures for claiming VAT refunds and tax credits with a 90-day processing period.
“An amount to 5% of the total VAT collection of the BIR and the Bureau of Customs from the immediately preceding year shall be automatically appropriated annually and shall be treated as a special account in the General Fund or as trust receipts to fund claims for VAT refunds,” according to the regulations.
Meanwhile, the BIR also amended provisions on withholding tax rates and adjusting the basis of certain income payments via RR 005-2025.
The withholding tax rate on payments made by credit card companies to merchants has been reduced to 0.5% on the gross amounts paid for goods and services.
Similarly, the regulations impose a 0.5% withholding tax on the gross remittances by e-marketplace operators and digital financial services providers to merchants of goods and services sold through the platform. — Aubrey Rose A. Inosante
