RR 7-2025

RR No. 7-2025 (issued February 27, 2025) implements the CREATE MORE Act (R.A. No. 12066) amendments to Sections 27, 28, and 34 of the Tax Code. It restates corporate income tax rates: 25% for domestic and resident foreign corporations in general; 20% for domestic corporations with net taxable income not exceeding P5 million and total assets not exceeding P100 million (excluding land); and 20% effective November 28, 2024 for registered business enterprises (RBEs) under the Enhanced Deductions Regime (EDR). The 20% EDR rate covers only taxable income from registered projects or activities. Input tax on local purchases attributable to VAT-exempt sales is deductible from gross income under Section 34(C)(8), and RBEs that already filed their annual income tax return for calendar year 2024 (or a fiscal year ending on or before the Regulations' effectivity) may carry forward the excess tax from the 25%-to-20% rate reduction.