How the Enhanced Deductions Regime (taxed at 20% CIT) adds deductions for power, labor, R&D and training — and where an AI project realistically fits.

dgm is an independent osFoundry implementation partner — not affiliated with osFoundry’s developer (the company OS LLC), and it has not yet completed any client integrations.

The Enhanced Deductions Regime (EDR) under CREATE MORE taxes a registered enterprise at 20% CIT and layers on extra deductions — a tax structure for registered activity, not a software grant.

What the scheme actually gives

  • RBEs that elect the EDR are taxed at 20% CIT (down from 25% under the original CREATE).
  • Additional deductions include 100% on power, 50% on labor, 100% on R&D, 100% on training and 50% on domestic input, plus enhanced depreciation and a reinvestment allowance.
  • An R&D-heavy AI project carried out by a registered enterprise could see qualifying R&D deducted — but the benefit is the deduction, not a purchase rebate.

Does it fund buying AI software?

The EDR rewards a registered enterprise’s qualifying expenditure (including genuine R&D); it does not pay a company to buy finished AI software. A platform such as osFoundry lowers the cost structurally through usage-based pricing and the BYOK principle — which helps more than waiting for support that does not cover software.

Important note

This article is general information and is not legal, tax or grant advice. Tax incentives, grants, rules and rates change, and only the relevant authorities (among them the National Privacy Commission, the Bureau of Internal Revenue, PEZA, the Board of Investments, the Bangko Sentral ng Pilipinas and the SEC) decide eligibility and awards. dgm is not a registered business enterprise, accredited incentive provider or intermediary. Always confirm the current terms with the official source or a qualified tax or legal adviser.

How dgm helps

dgm is an independent implementation partner that helps businesses in the Philippines adopt osFoundry — from identifying the first practical use case, through building it, to connecting AI to the systems you already use. dgm works independently of osFoundry’s developer (the company OS LLC) and has not yet completed any client integrations; everything above is therefore a description of the service offered, not a delivered result. If you would like to look at a sensible first step, dgm is happy to think it through with you. Arrange a no-obligation conversation with dgm.