The government is offering expansive tax relief to large corporations and top exporters under new implementation guidelines designed to spur industrial investment and lower operational overheads.

Under a Department of Finance (DOF) regulation signed by Finance Secretary Frederick D. Go, companies investing a minimum of ₱15 billion in capital can secure high-value enterprise status and unlock substantial tax deductions on core operational costs.

To qualify as High-Value Domestic Market Enterprises, companies must operate in import-substituting sectors or have generated at least ₱6.2 billion in export sales during the preceding year.

The regulatory framework operationalizes the Enhanced Deductions Regime under the National Internal Revenue Code, offering relief for the country's largest industrial players. The measures allow qualifying businesses to deduct expenses related to power, labor, research, and training at significantly elevated rates, mitigating tax burdens for energy-intensive manufacturers and technology firms.

“High-value domestic market enterprises refer to registered DMEs with investment capital exceeding ₱15 billion and that are engaged in sectors considered import-substituting, or with export sales in the immediately preceding year of at least $100 million,” the finance order stated.

The incentives extend beyond mega-scale domestic investors. Registered export enterprises—defined as entities exporting at least 70 percent of total output—qualify for the enhanced tax deductions upon registration without meeting the ₱15 billion capital baseline mandated for domestic market players. Standard domestic market enterprises and transferred registered business entities are also covered by the order.

To address chronic industrial energy costs, the order allows registered enterprises to claim an additional deduction equal to 100 percent of power expenses incurred during the taxable year from the total cost of production.

The DOF is also positioning human capital development as a deductible asset to drive domestic hiring. Enrolled firms can trim taxable income by an additional 50 percent of direct local labor expenses. This incentive is paired with a 100 percent additional deduction on research and development expenditures as well as technical training programs for Filipino workers.

For the manufacturing and tourism sectors, the government is incentivizing expansion with a reinvestment allowance, granting an additional deduction of up to 50 percent of reinvested capital within five years, subject to an expiration set for Dec. 31, 2034.

The DOF noted that all firms claiming these benefits must strictly adhere to substantiation requirements beginning in the taxable year ending Dec. 31, 2026.

To protect state revenue, businesses whose tax liabilities fall too low after applying the enhanced deductions will become subject to the Minimum Corporate Income Tax starting in their fourth year of operations, ensuring large enterprises contribute a baseline amount to public coffers.