The Philippines 2022: Economic and Investment Updates

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Republic Act No. 8762

Minimum PaidUp Capital*

USD 500,000 / EUR 450,000

USD 2.5 Million / EUR 2.25 Million

Minimum investment per retail store*

USD 200,000 / EUR 185,000

USD 830,000 / EUR 765,000

Pre-qualification of Foreign Retailers

No longer required

5 year retailing branches 5 year track record in retailing

Promotion of Locally Manufactured Products

Encouraged but amount is not specified

10%-30% of the aggregate cost of the stock inventory

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31,#451-651-2/ O#B0;1*$0)$H0;(0;26#$4)/01#$!2P#*# 8$%0$%)('#!"*$/'#R)['1#3$%#&$/'1(,*#)"&#3$%',6"#*$%0$%)(,$"1# 1+)..#4'#%'&5*'&#3%$/#cIV#($#GOV#)"&#1+)..#4'#%'&5*'&#35%(+'%#47# =V#')*+#7')%#5"(,.#,(#%')*+'1#GIV#47#GIG\A# CREATE Law

Old Rate

25%

30%

Minimum Corporate Income Tax for Domestic Corporations

1%

2%

Domestic Corporations with Net Taxable Income not exceeding ₱5M

20%

30%

Non-Profit Proprietary Educational Institutions and Hospitals

1%

10%

Domestic Corporations

25%

30%

Minimum Corporate Income Tax for Resident Foreign Corporations

1%

2%

Non-Resident Foreign Corporations

25%

30%

Regional Operating Headquarters

25%

10%

Resident Foreign Corporations

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K&4"85&'"(&4"85)89)G"0-&')C5-$54"/$0 CREATE Law Income Tax Holiday Duration

Old Law

Exporters

Domestic

Exporters

4-7 years

4-7 years

4-6 years

Domestic 4-6 years

Option 1: ITH + 5% tax on Gross Income Earned (GIE)

14-17 years

Special Corporate Income Tax (SCIT) / GIE Duration

ITH: 7 years, GIE: 10 years

Not Applicable

Indefinite

Indefinite

Option 2: ITH + Enhanced Deductions (ED) Enhanced Deductions Duration ITH + Enhanced Deductions Duration

X# X#

10 years

15 years

14-17 years

9-12 years

ITH: 7 years, ED: 10 years

ITH: 7 years, ED: 5 years

None

None

None

None

CREATE Law

Old Rate

Power Expense

150%

100%

Labor Expense

150%

150%

Training Expense

200%

100%

Research and Development

200%

100%

Domestic Input Expense

150%

100%

Reinvestment Allowance to Manufacturing Industry

Up to 50% of reinvested profit

None

10% buildings; 20% machinery

None

Depreciation Allowance

;5(7#'['/0(,$"#$"#,/0$%()(,$"#$3#*)0,().#'E5,0/'"(2#%)@#/)('%,).12#10)%'#0)%(12#$%#)**'11$%,'1 :JR#'['/0(,$"#$"#,/0$%()(,$"#)"&#:JR#S'%$<%)(,"6#$"#.$*).#05%*+)1'1 FM:8%4D8%"$54$<)F54$%:%"0$0 LOCATION / INDUSTRY TIERS

O,%&4"85)89)C5-$54"/$0) &'3,"'&#5"&'%#(+'#K(%)('6,*# !"-'1(/'"(#?%,$%,(7#?.)"# )"&#.$*)(,$"#*$"&,(,$"1

Tier 1

Tier 2

Tier 3

National Capital Region (NCR)

4 ITH + 10 ED/SCIT

5 ITH + 10 ED/SCIT

5 ITH + 10 ED/SCIT

Metropolitan areas or areas contiguous and adjacent to NCR

5 ITH + 10 ED/SCIT

6 ITH + 10 ED/SCIT

7 ITH + 10 ED/SCIT

All other areas

6 ITH + 10 ED/SCIT

7 ITH + 10 ED/SCIT

7 ITH + 10 ED/SCIT

O83$04"-)F54$%:%"0$0 LOCATION / INDUSTRY TIERS

!!

Tier 1

Tier 2

Tier 3

National Capital Region (NCR)

4 ITH + 5 ED

5 ITH + 5 ED

5 ITH + 5 ED

Metropolitan areas or areas contiguous and adjacent to NCR

5 ITH + 5 ED

6 ITH + 5 ED

7 ITH + 5 ED

All other areas

6 ITH + 5 ED

7 ITH + 5 ED

7 ITH + 5 ED

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