Fiscal Incentives Review Board (FIRB)
The Fiscal Incentives Review Board (FIRB) issued Advisory No. 010-2026, dated 22 July 2026, to circularize Department of Finance (DOF) Department Order (DO) No. 026-2026, which prescribes the terms and conditions for the grant of the Enhanced Deductions Regime (EDR) under Section 294(C) of the National Internal Revenue Code of 1997, as amended by Republic Act No. 12066 (CREATE MORE Act).
The following are the salient points of the Advisory:
- The Advisory circularizes DOF DO No. 026-2026, which provides the terms and conditions governing the grant and availment of the Enhanced Deductions Regime (EDR) by Registered Business Enterprises (RBEs).
- The DO covers registered domestic market enterprises, registered export enterprises that elect to avail of the EDR, and eligible pre-CREATE RBEs that transferred their registration under CREATE MORE and opted to avail of the EDR. (Section 3)
- The DO provides definitions of the terms used in the Order. (Section 4)
- Eligible RBEs may avail of enhanced deductions for qualified capital expenditures, labor expenses, research and development expenses, training expenses, domestic input expenses, power expenses, reinvestment allowances, expenses related to exhibitions, trade missions, or trade fairs, and enhanced Net Operating Loss Carry-Over (NOLCO), subject to prescribed conditions and limitations. (Section 5)
- The DO provides that enhanced deductions shall be treated as additional allowable deductions from taxable income and shall be applied only after the determination of gross income and the deduction of ordinary and necessary operating expenses. The tax base of enhanced deductions shall be the actual amount of costs and expenses incurred during the taxable year, without the benefit of other additional deductions provided under the Tax Code, as amended, or under other special laws. (Section 6)
- The Order prescribes the eligibility requirements, documentary requirements, substantiation rules, and compliance obligations for RBEs claiming enhanced deductions. (Sections 7 and 8)
- RBEs availing of the EDR must maintain adequate supporting documents and comply with the reporting and disclosure requirements prescribed under the Order. (Sections 9 and 10A)
- RBEs must submit a notarized comprehensive summary report to the concerned Investment Promotion Agency (IPA). The concerned IPA shall review the comprehensive summary report and endorse its findings and supporting documents to the Bureau of Internal Revenue (BIR). (Section 10B)
- Noncompliance with the requirements of the Order may result in the partial or full disallowance of the enhanced deductions and the imposition of applicable penalties. (Section 11)
- Beginning with taxable years ending 31 December 2026, compliance with the substantiation requirements and submission of the notarized comprehensive summary report is mandatory for RBEs claiming EDR incentives. (Section 12)
- The Department Order shall take effect fifteen (15) days after publication in a newspaper of general circulation and the filing of three (3) copies with the Office of the National Administrative Register (ONAR). (Section 15)
(R.G. Manabat & Co. note: As of date, the Advisory is not yet published in a newspaper of general circulation)
Here is the link to the full text of the issuance: FIRB Advisory No. 010-2026.