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Questions and Answers
The Strategic Investment Priority Plan is submitted to the ______ for approval.
The Strategic Investment Priority Plan is submitted to the ______ for approval.
President
The plan aims to grow a local pool of ______ to supply to domestic and global value chains.
The plan aims to grow a local pool of ______ to supply to domestic and global value chains.
enterprises
The Strategic Investment Priority Plan shall be valid for a period of ______ years.
The Strategic Investment Priority Plan shall be valid for a period of ______ years.
three
All sectors considered for the plan must go through a formal ______ process.
All sectors considered for the plan must go through a formal ______ process.
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The plan includes recommendations for types of non-fiscal support needed to create ______ jobs.
The plan includes recommendations for types of non-fiscal support needed to create ______ jobs.
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The Strategic Investment Priority Plan aims to reduce dependence on ______.
The Strategic Investment Priority Plan aims to reduce dependence on ______.
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Enhanced deductions in the plan serve as a form of ______ to encourage investment.
Enhanced deductions in the plan serve as a form of ______ to encourage investment.
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The entity shall only be liable to income tax on the net gain on sale of ______.
The entity shall only be liable to income tax on the net gain on sale of ______.
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The plan includes priority projects that align with the Philippine ______ Plan.
The plan includes priority projects that align with the Philippine ______ Plan.
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The sale of scraps amounted to ______ 170,000.
The sale of scraps amounted to ______ 170,000.
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The regular income tax rate is ______ percent.
The regular income tax rate is ______ percent.
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Registered export enterprises can opt for a special income tax rate of ______ percent.
Registered export enterprises can opt for a special income tax rate of ______ percent.
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The SCIT rate is based on the ______ earned.
The SCIT rate is based on the ______ earned.
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The option for special corporate income tax will be available for ______ years.
The option for special corporate income tax will be available for ______ years.
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Deductions allowed include direct costs such as salaries, wages, and ______ expenses.
Deductions allowed include direct costs such as salaries, wages, and ______ expenses.
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Depreciation of machinery, equipment, and ______ is allowed as a deduction.
Depreciation of machinery, equipment, and ______ is allowed as a deduction.
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Any enterprise registered with Investment Promotion Agencies to engage in ______ activity and IT services resulting to direct exportation
Any enterprise registered with Investment Promotion Agencies to engage in ______ activity and IT services resulting to direct exportation
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An isolated and policed area adjacent to a ______ which shall be operated and managed as a separate customs territory
An isolated and policed area adjacent to a ______ which shall be operated and managed as a separate customs territory
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Purchases of capital goods with a useful life of more than one year acquired for an entity’s ______ of goods and services
Purchases of capital goods with a useful life of more than one year acquired for an entity’s ______ of goods and services
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A special incentive providing additional special deductions to registered enterprises on specific types of ______
A special incentive providing additional special deductions to registered enterprises on specific types of ______
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Document serving as proof of entitlement for tax and duty free ______
Document serving as proof of entitlement for tax and duty free ______
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Government entities created to grant, administer ______ and oversee operation in ecozones
Government entities created to grant, administer ______ and oversee operation in ecozones
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Plan prepared by BOI containing the priority projects, scope and coverage of ______ and industry tiers wherein investments are encouraged
Plan prepared by BOI containing the priority projects, scope and coverage of ______ and industry tiers wherein investments are encouraged
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The value of investment that shall be used to carry out a registered ______
The value of investment that shall be used to carry out a registered ______
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Which of the following is not a fiscal incentive specifically identified under Title XIII of the CREATE Law? a. Income tax holiday b. Exemption from expanded withholding tax c. 5% SCIT or enhanced deductions d. VAT zero-rating on local ______
Which of the following is not a fiscal incentive specifically identified under Title XIII of the CREATE Law? a. Income tax holiday b. Exemption from expanded withholding tax c. 5% SCIT or enhanced deductions d. VAT zero-rating on local ______
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The maximum ITH for domestic market enterprises is ______ years.
The maximum ITH for domestic market enterprises is ______ years.
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The maximum years that export enterprises may avail the 5% SCIT or enhanced deductions is ______ years.
The maximum years that export enterprises may avail the 5% SCIT or enhanced deductions is ______ years.
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Jackie Palubos is an employee of a pioneer PEZA enterprise. Her compensation income will be taxed at ______ due to income tax holiday.
Jackie Palubos is an employee of a pioneer PEZA enterprise. Her compensation income will be taxed at ______ due to income tax holiday.
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The reckoning date of the income tax holiday is ______ of registration.
The reckoning date of the income tax holiday is ______ of registration.
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A Tier II enterprise in Bulacan that started its commercial operation on June 19, 2022, will have its income tax holiday expire on ______, 2026.
A Tier II enterprise in Bulacan that started its commercial operation on June 19, 2022, will have its income tax holiday expire on ______, 2026.
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Income derived from unregistered activities are taxed at, except ______.
Income derived from unregistered activities are taxed at, except ______.
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The following types of tax incentives, except one, may be granted to domestic market enterprises: a. Special Corporate Income Tax b. Enhanced Deductions c. Income Tax Holiday d. ______
The following types of tax incentives, except one, may be granted to domestic market enterprises: a. Special Corporate Income Tax b. Enhanced Deductions c. Income Tax Holiday d. ______
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Stand Company started its commercial operations on June 30, 2022, registered to avail ______ incentives.
Stand Company started its commercial operations on June 30, 2022, registered to avail ______ incentives.
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For the year 2028, Stand Company's gross sales for Jan-Jun amounted to ______ million.
For the year 2028, Stand Company's gross sales for Jan-Jun amounted to ______ million.
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Cost of sales for the year 2028 in the second half was ______ million.
Cost of sales for the year 2028 in the second half was ______ million.
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An export enterprise with an expired ITH can choose to be taxed at the regular corporate tax rate with enhanced ______.
An export enterprise with an expired ITH can choose to be taxed at the regular corporate tax rate with enhanced ______.
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A registered export enterprise had gross sales of ______ million during the year.
A registered export enterprise had gross sales of ______ million during the year.
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Included in the regular deductions is ______ thousand for training expenses.
Included in the regular deductions is ______ thousand for training expenses.
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A qualified enterprise began its commercial operations on April 1, ______.
A qualified enterprise began its commercial operations on April 1, ______.
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In computing income tax payable, operating expenses amounted to ______ million for the second half of 2028.
In computing income tax payable, operating expenses amounted to ______ million for the second half of 2028.
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The industry of the registered project or activity shall be prioritized according to the national industrial strategy specified in the Strategic Investment Priority ______.
The industry of the registered project or activity shall be prioritized according to the national industrial strategy specified in the Strategic Investment Priority ______.
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Tier I Activities have high potential for job ______.
Tier I Activities have high potential for job ______.
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Tier II Activities produce supplies, parts and components that are ______ produced.
Tier II Activities produce supplies, parts and components that are ______ produced.
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Tier III Activities result in breakthroughs in science and ______.
Tier III Activities result in breakthroughs in science and ______.
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Preferential Taxation provides essential support for sectors that are critical to ______ development.
Preferential Taxation provides essential support for sectors that are critical to ______ development.
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The CREATE Law Tax Incentives are aimed at supporting the commercialization of ______.
The CREATE Law Tax Incentives are aimed at supporting the commercialization of ______.
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Emerging sectors are critical to the structural transformation of the economy and require substantial ______ efforts.
Emerging sectors are critical to the structural transformation of the economy and require substantial ______ efforts.
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Those provided under the 2020 Green Ecosystems Investment ______ Plan.
Those provided under the 2020 Green Ecosystems Investment ______ Plan.
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Study Notes
CREATE Law Tax Incentives
- The Board of Investments (BOI) and Fiscal Incentives Review Board (FIRB) formulate the Strategic Investment Priority Plan (SIP).
- The SIP is for three (3) years, subject to review and amendment every three (3) years.
- SIP prioritizes projects in the Philippine Development Plan (PDP).
- The SIP may include priority projects, coverage of locations and industries, and terms for enhanced deductions.
- The SIP includes sectors needing support for long-term sustainable growth.
- Investment Promotion Agencies (IPAs) accept applications only if listed in the SIP.
- Projects not in the SIP are automatically disapproved.
- BOI may adjust SIP terms, suspend or add areas.
- FIRB grants tax incentives, but may delegate to IPAs for investment capital below fifteen billion pesos.
- Splitting investment capital to avoid FIRB jurisdiction is not permitted.
- Export and domestic enterprises qualifying for registration under the law.
- Applicants must comply with all requirements.
- Project or activity nationalization by law is permissible (Constitution requirements adhered to).
- Income tax holidays' commencement dates depend on commercial operations and registration dates (3 years).
- Different tiers (I, II, III) have different activity focuses (job creation, basic goods, value chain improvement).
- Incentives only apply during registration periods.
- Tax incentives for certain areas include additional years.
- Tax incentives for disaster zones or relocation include additional years for certain project types..
- Certain registered entities qualify for a six-year income tax holiday and are only liable for the net gain on sale of scrap.
- Specific deductions for expenses include raw materials, supplies, equipment, and service supervision salaries.
- The tax holiday period remains valid until the end of the registered period.
- The 5% special corporate income tax rate for qualified export enterprises is available.
- Some deductions are only available to certain companies when they are registered.
- 5% special corporate income tax is available and can take precedence over other deductions and taxes.
- Specific rules determine if raw materials, equipment, other expenses are tax-deductible.
- Net operating losses can be carried over as deductions.
- The duty exemption is for importation of capital equipment, raw materials, spare parts or accessories for qualifying activities.
- Importation of crude oil for refining may be exempt from applicable duties and taxes under specific circumstances.
- Non-compliance or material misrepresentation can result in incentive cancellation.
- Registered enterprises enjoy rules for transition during the law's effectiveness, including options for continued or new incentive applications.
- Export enterprises are explicitly defined in the text, allowing for various business operations.
- The exercise of the right for preferential taxation and its specific conditions are crucial for eligible applicants.
Other Incentives
- Tax incentives for the importation of petroleum products may depend on how the products are used.
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Description
This quiz covers the law and regulations regarding tax incentives in the Philippines, focusing on the Strategic Investment Priority Plan (SIP) formulated by the Board of Investments and the Fiscal Incentives Review Board. Test your knowledge on the eligibility criteria, application processes, and the importance of the SIP for sustainable growth in various sectors.
