RR No. 18-2024: Implementing Section 32(B)(5) of the National Internal Revenue Code of 1997, as amended by Republic Act 12066, or the CREATE MORE Act

Summary

RR No. 18-2024 implements Section 32(B)(5) of the NIRC of 1997, as amended by RA No. 12066 (CREATE MORE Act), on income exempt under treaty obligations.

Key points

1. Exclusion from gross income. Income of any kind is excluded from gross income under Section 32(A) and exempt from Income Tax to the extent required by a treaty obligation binding on the Philippines. This includes agreements entered into by the President or authorized representatives with economies and administrative regions, duly concurred in by at least two-thirds of all Senate members.
2. No recognition of statehood. The Regulations do not recognize the statehood of those economies and administrative regions. They do not derogate from any policy the Philippines has agreed to adopt and implement.
3. List of economies. The President or representatives negotiate only with economies and administrative regions on the list provided by the DFA. The indicative list is Annex A of the Regulations, and the DFA updates it and communicates it to the Department of Finance and the BIR as needed.

Who is affected

• Taxpayers with income covered by treaty obligations or agreements with listed economies and administrative regions

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.