The Bureau of Internal Revenue (BIR) has released the 23-page implementing rules and regulations (IRR) for the reduction of corporate income tax (CIT) rate of companies and other business taxpayers as mandated by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.

Department of Finance (DOF) Secretary Carlos G. Dominguez signed Revenue Regulations No. 5-2021 on the recommendation of BIR Commissioner Caesar R Dulay.

"These regulations are hereby promulgated to implement the new income tax rates on the regular income of corporations, on certain passive income and additional allowable deductions of person engaged in business and practice of profession," the guidelines stated.

Basically, the IRR fixes the CIT of small and medium enterprises with taxable income not exceeding P5 million at 20 percent, and large corporations at 25 percent from the previous 30 percent that had been considered the highest among countries in the region.

The IRR guides taxpayers by way of illustration and matrix on how to apply the new rates to income earned starting last July 2020.

For taxpayers who have already submitted their ITRs, they are advised to amend them using the applicable matrix of the guidelines.

Among others, it grants non-profit hospitals and schools with a preferential tax rate of one percent from the previous 10 percent.

The guidelines' final version was culled from four draft regulations that revenue officials discussed with a group of businessmen in an online seminar last April 6.

President Duterte signed CREATE last month in a bid to attract foreign investments, generate more jobs, and help businesses recover from the crippling effects of the coronavirus disease (COVID-19) pandemic.

The law seeks to grant more than P1 trillion in tax relief to business operators for the next 10 years.