FISCAL & NON-FISCAL INCENTIVES OF PEZA-REGISTERED ENTITIES BASED ON EXECUTIVE ORDER (EO) 226 – OMNIBUS INVESTMENTS CODE OF THE PHILIPPINES

Fiscal Incentives
Incentives	Description
1.      Income Tax Holiday (ITH)	A.     Exemption from payment of income taxes reckoned from the scheduled “Start of Commercial Operation” (SCO). a.       New projects with a pioneer status-six (6) years; b.      New projects with a non-pioneer status -four (4) years; c.       Expansion projects for three (3) years. Exemption is limited to incremental sales revenue/volume; d.      New or expansion projects in less developed areas for six (6) years, regardless of status; and e.       Modernization projects for three (3) years. Exemption is limited to incremental sales revenue/volume. In no case shall a registered pioneer firm avail of this incentive for a period exceeding eight (8) years. For purposes of the Income Tax Holiday entitlement, the SCO shall be the date of the first sales invoice. The Registered Enterprise shall submit a Certification (PEZA Form No. ERD.2.F.005) attested by the Zone Administrator/Manager/Officer in Charge within seven (7) days from the date of actual SCO. B.     Registered as a VAT Taxpayer
2.      5% Gross Income Tax (GIT)	A.     Exemption from all national and local taxes after the lapse of ITH. Distribution of the 5% Gross Income Tax 3% - National Government (BIR) 2% - Local Government (City or Municipal Treasurer) B.     VAT Exempt Taxpayer C.     “Gross Income Earned” shall refer to gross sales derived from registered activity within the zone, net sales discounts, sales returns and allowances and cost of sales, but before any deduction from administrative, marketing, selling and/or operating expenses or incidental losses during a given taxable year D.     Allowable Deductions of a Registered Export Manufacturing Enterprise under 5% GIT a.       Direct salaries, wages or labor expenses b.      Production supervision salaries c.       Raw materials used in the manufacture of products d.      Decrease in Goods in Process Account (Intermediate goods) e.       Decrease in Finished Goods Account f.       Supplies and fuels used in production g.       Depreciation of machinery and equipment used in production, and of that portion of the building owned or constructed that is used exclusively in the production of goods h.      Rent and utility charges associated with building, equipment and warehouses used in production i.        Financing charges associated with fixed assets used in production the amount of which were not previously capitalized E.      Exemption from payment of Real Property Tax
3.      Tax and Duty Free Importation of Raw Materials, Capital Equipment and Spare Parts	A.     On merchandise, raw materials, supplies, articles, equipment, machineries, spare parts and wares to be sold, stored, broken up, repacked, assembled, installed, sorted, cleaned, graded or otherwise processed, manipulated, manufactured, mixed with foreign or domestic merchandise whether directly or indirectly related in such activity, shall not be subject to customs and internal revenue laws and regulations of the Philippines nor to local tax ordinances. B.     On Importation of Capital Equipment and Spare Parts Conditions to be exempt from duties and taxes: a.       Must be directly and actually needed and will be used exclusively by the Registered Enterprise in its registered activity; b.      Importation of spare parts must be restricted only to component spare parts for the specific machinery and/or equipment authorized to be imported; and c.       Must be subject to reasonable allowances, the rated capacity of the capital equipment to be imported must be within the registered capacity of the ECOZONE Export or Free Trade Enterprise
4.      Exemption from wharfage dues and export tax, import or fees.	A Registered Export Manufacturing Enterprise shall be exempt from payment of wharfage dues and any export tax, impost or fee on the exportation of its registered export products.
5.      Exemption from Creditable/Expanded Withholding Tax	Exemption from withholding of customers for both ITH and 5% GIT on Registered Activities subject to allowable limit on sales to custom territory.
6.      VAT zero-rating of local purchases subject to compliance with PEZA and BIR requirements	Registered Export Enterprise shall secure a VAT Zero Rating Certificate from PEZA (PEZA-ERD Form 97-01) and from the BIR to be presented to suppliers of goods and/or services
7.      Exemption from payment of any local government imposts, fees, licenses or taxes except real property	A.     On Local Government Imposts, Fees, and Licenses ITH 5% GIT Local Government Imposts, Fees, Licenses or Taxes Required Exempt B.     On Real Property Tax Real Property Tax on: ITH 5% GIT Land owned by the Registered Enterprise inside the Ecozone. Yes No Building Yes No Machineries/Production Equipment Yes But payment shall start on the 4th year of operation/ installation of machineries/ production equipment No

Non Fiscal Incentives
Incentives	Description
1.      Simplified Import – Export Procedures	Registered Enterprise can use Electronic Import Permit System and Automated Export Documentation System
2.      Employment of Foreign Nationals	Registered Enterprises may employ foreign nationals in executive, supervisory, technical and advisory positions with certain condition: a.       Executive positions shall pertain only to the president, vice-president, treasurer and general manager, or their equivalents; b.      The total number of foreign nationals employed by an ECOZONE Enterprise in supervisory, technical or advisory positions shall not at any time exceed five percent (5%) of its workforce unless expressly authorized by the Secretary of Labor and Employment; c.       No Filipino within the Ecozone possesses the technical skills required thereof.
3.      Permanent Resident Status	Special Non-Immigrant Visa with Multiple Entry Privileges for the following non-resident Foreign Nationals in a PEZA-registered Economic Zone Enterprise : Investor/s, officers, and employees in supervisory, technical or advisory position, and their spouses and unmarried children under twenty-one years of age.   Provided that investors shall have initial investment of at least $150,000.00 PEZA also extends Visa Facilitation Assistance to foreign nationals their spouses and dependents.