This revenue regulation is issued to implement Section 32(B)(5) of the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No. 12066 (CREATE MORE Act).
Pursuant to Section 32(B)(5) of the NIRC, as amended by RA No. 12066 or the CREATE MORE Act, income of any kind shall be excluded from the computation of gross income, as defined under Section 32(A) of the NIRC, and shall be exempt from Income Tax to the extent required by any treaty obligation binding upon the Government of the Philippines, or his/her authorized representative(s), including agreements entered into by the President, or his/her authorized representative(s), with economies and administrative regions, and duly concurred in by at least two-thirds of all the members of the Senate.
Nothing in these Regulations shall be constructed as recognizing the statehood of such economies and administrative regions, and derogating, from whatever policy that the Philippines has agreed to adopt and implement.
The President or his/her authorized representative(s) shall only negotiate with economies and administrative regions as contained in the list provided by the Department of Foreign Affairs (DFA). The indicative list of such economies and administrative regions is attached in the regulations as Annex “A” and forms an integral part of these Regulations.
Such list shall be regularly updated and/or communicated by the DFA to the Department of Finance and Bureau of Internal Revenue as the former deems necessary.