The Department of Interior and Local Government, Department of Finance, and Department of Trade and Industry have issued Joint Memorandum Circular No. 01 dated 23 March 2026, which provide for the Guidelines on the Imposition of Local Taxes, Fees, and Charges on Registered Business Enterprises (“RBEs”) Availing of Tax Incentives.

Transitioning Pre-CREATE RBEs

Transitioning Pre-CREATE RBEs refer to RBEs granted incentives prior to the effectivity of Republic Act (RA) No. 11534, otherwise known as the “CREATE Act” and subject to the rules provided under the concerned Investment Promotion Agency (IPA) charter and Section 311 of the National Internal Revenue Code, as amended.

These RBEs shall continue to enjoy the incentives granted to their project or activity, subject to the following conditions:

  1. Pre-CREATE RBEs availing of income tax holiday (ITH) only and are certified either as pioneer or non-pioneer shall be exempt from local business taxes for 6 to 4 years, respectively, from the date of registration.In the event that the concerned local government unit (LGU) imposes a Registered Business Enterprise Local Tax (RBELT), the Pre-CREATE RBEs may annually elect to avail of either the exemption from local business tax or the LGU-imposed RBELT.The RBELT refers to a tax imposed by an LGU at a rate not exceeding 2% of the RBE’s gross income during the period of its availment of ITH and Enhanced Deductions Regime (EDR), which shall be in lieu of all local taxes, fees, and charges. Where 2 or more LGUs cover the same RBE, the total RBELT to be imposed shall not exceed 2% of the gross income of the RBE’s project or activity.The RBEs shall be deemed to have elected to avail of the RBELT unless they expressly signify their intention not to avail thereof. The election, once made, shall be irrevocable for the entire year.
  2. Pre-CREATE RBEs availing of ITH and/or followed by the 5% gross income tax shall be subject to the foregoing rule (item 1) during the remaining period of the ITH. After the expiration of the ITH and during the availment of the 5% gross income tax, Pre-CREATE RBEs shall be exempt from all local taxes, fees, and charges until 31 December 2034. In no case shall the LGUs impose the RBELT during the period of availment of the 5% gross income tax.
  3. Pre-CREATE RBEs availing of the 5% gross income tax only shall be exempt from all local taxes, fees, and charges until 31 December 2034. In no case shall the LGUs impose the RBELT during the period of availment of the 5% gross income tax.

Transitioning CREATE RBEs and RBEs Granted Incentives under CREATE MORE

CREATE RBEs refer to RBEs granted incentives during the effectivity of the CREATE Act and subject to the rules provided under Section 31 of RA No. 12066, otherwise known as “CREATE MORE”.

  1. CREATE RBEs and RBEs granted incentives under CREATE MORE and are certified either as pioneer or non-pioneer shall be exempt from local business tax for 6 to 4 years, respectively, from the date of registration.

    In the event that the concerned LGU imposes an RBELT, such RBEs may annually elect to avail of either the exemption from local business tax or the LGU-imposed RBELT.

    The RBEs shall be deemed to have elected RBELT unless they expressly signify their intention not to avail thereof. The election, once made, shall be irrevocable for the entire year.

  2. CREATE RBEs and RBEs granted incentives under CREATE MORE availing of ITH or EDR may be subject to local taxes, fees, and charges imposed by the LGU, except under the following instances:
    1. When the LGU has granted tax exemptions, incentives, or reliefs; and
    2. When the transaction is expressly exempted under existing laws, rules, regulations.
  3. CREATE RBEs and RBEs granted incentives under CREATE MORE availing of the 5% gross income tax/special corporate income tax (SCIT) shall be exempt from all local taxes, fees, and charges for the duration of the period specified under the terms of such grants. The LGUs shall not impose RBELT during the period of availment of the 5% SCIT.

Prima Facie Evidence of Entitlement The Certificates of Incentive, Certificates of Registration, Certificates of Registration and Tax Exemption, or other equivalent documents issued by the concerned IPA shall be prima facie evidence of entitlement to incentives, including exemption from local taxes, fees, and charges. The presentation of the said documents to the LGU shall be deemed sufficient to avail of the tax exemption/incentives.