REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE SUBIECT : AMENDING RULE 2, SECTIONS 4, 5 AND &; RULE 3, SECTION 3; RULE 27, SECTION 2, AND RULE 18 SECTION S, AND ADDING A NEW RULE 18 SECTION 6 OF THE IMPLEMENTING RULES AND REGULATIONS OF TITLE Xi OF REPUBLIC ACT NO. 8424 OTHERWISE KNOWN AS THE “NATIONAL INTERNAL [REVENUE CODE OF 1997", AS AMENDED BY REPUBLIC ACT NO. 11534 OR THE “CORPORATE RECOVERY AND TAX INCENTIVES FOR ENTERPRISES (CREATE) ace SECTION 1. Scope. Pursuart to Section 24 of Republc Act No. 11534, entitled “AN ACT REFORMING THE CORPORAE INCOME TAX AND INCENTIVES SISTEM, AMENDING FOR THE PURPOSE SECTIONS 20, 22, 25, 27, 8, 23, 38, 40, 57, 109, 116, 208 AND 290 OF THE NATIONAL INTERNAL REVENUE CODE OF 1987, AS AMENDED, AND CREATING THEREIN NEW. TITLE Kil, AND FOR OTHER PURPOSES,” the Secretary of Finance andthe Secretary of Trade and industry hereby promulgate these amendments tothe CREATE Implementing Rules and Regulations (i). SECTION 2, Rule 2, Sections Sand ofthe CREATE IR is hereby amended to reedas follows: ULE 2, Taxand Duty Incentives ‘SECTION. 4, Custom Duty Exemption on Importation of Capital Equipment, Row Materials, Spare Ports, or Accessories. — REGISTERED EXPORT AND DOMESTIC MARKET ENTERPRISES SHALL ENJOY EXEMPTION FROM ‘CUSTOMS DUTIES O THEIR importation af capital equipment, raw materials, spare parts, and accessories FOR THEIR REGISTERED PROJECT OR ACTIVITY FOR A MAXIMUM PERIOD OF SEVENTEEN (17) YEARS AND TWELVE (12) YEARS FROM THE DATE OF REGISTRATION, RESPECTIVELY, UNLESS OTHERWISE EXTENDED UNDER THE SIPP; proviéed, that the follwing conditions are compled with SECTION, 5, Value-added Tax (VAT) zeroating and exemption. ~ The VAT exemption on imporation and VAT 2ero~ting on local purchases shall oly apaly to goods and services drectiy and exclusvely used in the registered project or activity of registered export enterprise, FOR A MAXIMUM PERIOD (OF SEVENTEEN (17) YEARS FROM THE DATE OF REGISTRATION, UNLESS (OTHERWISE EXTENDED UNDER THE SPP. ‘he direct and excusve use forthe registered projet or att fetes to rw material, inventories suples, equipment, goods, PACKAGING MATERIALS,SERVICES, INCLUDING PROMISION OF BASIC INFRASTRUCTURE, UTRITES, AND MAINTENANCE, REPAIR AND OVERKAUL OF EQUIPMENT, and othe expenglures DIRECTLY ATTRIBUTABLE TO te regltered projector actvity without which the registered projet er activity cannot be eared out; PROVIDED, THAT THE VAT ‘ZERO-RATING OW LOCAL PURCHASES SHALL BE GRANTED UPON THE ENDORSEMENT OF THE CONCERNED IPA, IN ADDITION TO THE DOCUMENTARY REQUIREMENTS OF THEIR. SECTION 8. Toxotion ofter the expiation of the period of avaiiment of Incentive. - Al registered business enterprises shall py all applicable taxes atthe regular ates under the Code and athe aws after the expiration ofthe periodof incentives of ther registered projector activity UNLESS OTHERWISE PROVIDED IN THESE RULES. ‘SECTION 3 Rule 3, Sectlon 3 ofthe CREATE IRR ishereby amended to read as fellows SECTION 3. Qualifed expansion, entirely new projec, or existing reglstered projects or octivites. Qualified expansen projects or activites defined under Rule 1, Section &(U), may be granted three (3) YEARS ITH FOLLOWED BY THE ENHANCED DEDUCTIONS OR SCIT, AS APPLICABLE. THE EXPANSION PROJECT OR [ACTIVITY MAY ALSOBE ENTITLED TO DUTY EXEMPTION, VAT EXEMPTION ON IMPORTATION AND VAT ZERO RATING ON LOCAL PURCHASES UNDER RULE 2, SECTIONS 4 AND 5, RESPECTIVELY; Provided, thot the application for tax Incentives fora qualified expansion project or actity shall be approved bythe FIRB orcancernedPA, asthe caze may be, based onthe amount of investment capital ofthe expansion projector ativty under le 5, Setion 1 ‘SECTION 4 Rule 17, Section 2 of the CREATE IR is hereby amended to read as follows ULE 27, Transitory and Miscellaneous Provisions SECTION 2. Entitement to duty exemption on importation of capitol ‘equipment, raw materials, spare ports or ocestores. ~ Exiting RBES with valid Certificate of authority to Import (CA) or Admission Entry whose capita equipment, raw meters, spare parts or accessories were ordered, as ‘efleted inthe dite ofthe purchase order or on the date ofthe opening of the corresponding letters of ered o loaded, a reflected inthe bile lading date; o are stilin-rensit during the effectivity of xcutive Order 8. Serie of 2018, shall qualiy for the duty exemption until the expiration of the Cal/Admision ny. SECTIONS. Rule 18, Secten Sof the CREATE IRRs hereby amended and Section Gi inserted to read a followsULE 48. Investments prior to the effectivity of the Act SECTION 5. Non-income related tax incentives. — Al egistered EXPORT AND [DOMESTIC MARKET enterprises that wil contiave to avallof thelr exising tax incentives subject to Sections 1, and3 ofthis Rule, may continue toeroy the {uty exemption, VAT EXEMPTION ON IMPORTATION, AND VAT ZERO-RATING (ON LOCAL PURCHASES AS PROVIDED IN THEIR RESPECTIVE IPA REGISTRATIONS; Provided, that the DUTY EXEMPTION, VAT-exemplion on importation, and VAT 2er0-ratng on local purchases shall only apaly te goods and services directly ATTRIBUTABLE TO and exclusively used in the regstered project or acthty OF SAID REGISTERED export enterprises LOCATED INSIDE ‘THE ECOZONES AND FREEPORTS UNTILTHE EXPIRATION OF THE TRANSITORY PERIOD; PROVIDED, FURTHER, THAT IMPORTATION OF CAPITAL EQUIPMENT, SPARE PARTS, AND ACCESSORIES BY EXISTING EXPORT ENTERPRISES AND DOMESTIC MARKET ENTERPRISES REGISTERED WITH THE ‘B01 PRIOR TO THE EFFECTIVITY OF THE ACT SHALL CONTINUE TO BE SUBIECT ‘TO DUTY EXEMPTION FOR A PERIOD OF FIVE (5) YEARS FROM DATE OF REGISTRATION. SECTION 6, TRANSITORY RULES FOR OFFSHORE GAMING LICENSEES AND ‘ACCREDITED SERVICE PROVIDERS. - NOTWITHSTANDING THE PROVISIONS (OF REPUBLIC ACT NO. 11590, AN OFFSHORE GAMING LICENSEE OR AN [ACCREDITED SERVICE PROVIDER DEFINED UNDER SECTIONS 22 (i) AND 27 (G) OF THE CODE, AS AMENDED, DULY REGISTERED WITH, AND EN.OYING INCENTIVES GRANTED BY AN IPA UNDER ITS CHARTER PRIOR 10 THE EFFECTIVITY OF THIS ACT, SHALL CONTINUE TO ENJOY SAID INCENTIVES LUNTIL THE EXPIRATION OF THE TRANSITORY PERIOD IN SECTION 313 OF THE (CODE, AS IMPLEMENTED BY SECTIONS 1, 2, AND 3 OF THIS RULE, OR THE EXPIRY OF THE UCENSE OR ACCREDITATION OF THE REGISTERED ENTERPRISE, WHICHEVER COMES EARLIER; PROVIDED THAT, SAID OFFSHORE GAMING LICENSEES AND ACCREDITED SERVICE PROVIDERS SHALL THEREAFTER BE SUBIECT TO THE APPLICABLE TAXES UNDER REPUBC ACT NO. 11590 AND ITS IMPLEMENTING RULES AND REGULATIONS. SSECTION 6. Repealing couse. Al existing cules and regulations or parts thereof whi inconsistent with the provisions ofthis IRR are hereby amended accordingly ich are SECTION 7. effectivity. These Rules shall take effect immediately upon peblication in & newspaper of general circulation REO G. DOM RAMON mt. 199tz. Secretary of Finance Secretary of Trade and industry Page 3013 a uy)