FISCAL & NON-FISCAL INCENTIVES OF PEZA-REGISTERED ENTITIES BASED ON EXECUTIVE ORDER (EO) 226 – OMNIBUS INVESTMENTS CODE OF THE PHILIPPINES
Fiscal Incentives
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Incentives
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Description
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1.
Income
Tax Holiday (ITH)
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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
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2.
5%
Gross Income Tax (GIT)
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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
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3.
Tax
and Duty Free Importation of Raw Materials, Capital Equipment and Spare Parts
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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
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4.
Exemption
from wharfage dues and export tax, import or fees.
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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.
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5.
Exemption
from Creditable/Expanded Withholding Tax
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Exemption
from withholding of customers for both ITH and 5% GIT on Registered
Activities subject to allowable limit on sales to custom territory.
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6.
VAT
zero-rating of local purchases subject to compliance with PEZA and BIR
requirements
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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
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7.
Exemption
from payment of any local government imposts, fees, licenses or taxes except
real property
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A. On Local Government Imposts, Fees, and
Licenses
B. On Real Property Tax
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Non
Fiscal Incentives
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Incentives
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Description
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1. Simplified Import – Export Procedures
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Registered Enterprise can use Electronic
Import Permit System and Automated Export Documentation System
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2.
Employment
of Foreign Nationals
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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.
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3.
Permanent
Resident Status
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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.
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