INTRO: ZZZ ZZZ ZZZ

Comment/Discussion:

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What is the CREATE Law?

*The said law will help reduce Corporate Income Taxes (for Domestic and Foreign Corporations as
well as MSMEs - Micro, small and medium enterprises), and is in a way, a response to ease off the
financial burden these corporations have undergone because of the COVID 19 pandemic.*

*CREATE would allow corporations to reduce their tax expenses and reallocate these tax savings to
other priority expenses.*

*So, in this presentation, I and my groupmates hope to introduce you to the newly created CREATE
tax law, wherein we will discuss topics including it’s Salient Features, Frequently Asked Questions
about the said law and also, we will show some Illustrative Problems as well. So, let's start this taxing
discussion with some important terms and definitions!

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* The website of the Bureu of Internal Revenue defines income taxation as follows

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*Section 4 of the CREATE Law defines the following terms:

a. Corporation - The term "corporation" shall include One Person corporations, partnerships, no
matter how created or organized, joint-stock companies,
joint accounts, associations, or insurance companies, but does not include general professional
partnerships and a joint venture or consortium formed for the
purpose of undertaking construction projects, or engaging in petroleum, coal, geothermal and other
energy operations pursuant to an operating consortium
agreement under a service contract with the Governemnt.

*As you can see here, The CREATE expanded the definition of taxable corporations to include One-
Person Corporations which are corporations with a single stockholder.
With this amendment, a sole proprietor may find it more beneficial to incorporate his/her business
into a One-Person Corporation.

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*1.What are the salient features of the CREATE Law?
The CREATE Law, so far, is the largest fiscal stimulus granted by the Philippine government to
corporations. It was passed into law, to respond to the COVID 19
pandemic and it intends to alleviate the burden that the latter has caused to corporations operating in
the country, particularly, Micro, Small, and Medium
enterprises or MSMEs.