President Rodrigo Duterte has signed into law a measure that finally lowers the highest corporate income tax in Southeast Asia.
Malacañang confirmed that Duterte signed the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, which is now Republic Act No. 11534.
However, the President vetoed certain provisions in the law.
A line that amends the National Internal Revenue Code such that house and lot and residential dwellings valued at P4.2 million are also exempt from Value Added Tax – Under the amended Tax Code, only residential dwellings valued at a maximum of P2.5 million is tax exempt in order to give relief to buyers of socialized housing. If this line is allowed to stand, this benefit would also go to people who can afford proper housing. It could also be abused if properties are parceled into lots so that individual values fall within that bigger VAT-exempt threshold.
All sales of residential house and lot starting Jan. 1, 2021 is affected by this.
Read here the lines vetoed by Pres. Rodrigo Duterte: https://www.scribd.com/document/500407077/Duterte-Line-Vetoes-in-CREATE-Law
Read here RA 11534 (CREATE Law): https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2021%20RMCs/RMC%20No.%2042-2021%20RA%20No.%2011534.pdf
