Tax Incentive Programs

The Philippine government has several tax incentive programs depending on the nature of one’s business, with different incentive schemes available relative to the location and registration of the proposed business activity.
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AccountingThe Philippines Government has created several programs and tax incentives to attract investors to the country. The two main offices awarding these incentives are the BOI and PEZA.  When considering which organization will give you more benefits there are some important matters to factor in to the decision. Will the project be export of or domestic oriented? Is its primary activities listed on the current Investment Priorities Plan? Where will the project be located and operated?Triple i helps our clients to determine all the answers to questions regarding BOI and PEZA. Below is a small comparison to give an idea of the main differences between the two organizations. Contact Us for more information regarding BOI or PEZA.

Board of Investments

Foreign and local companies setting up outsourcing operations in the Philippines may opt to register with BOI for tax incentives purposes.

Legal Entities Which Can Avail

Time to Register

  • Before the start of commercial operation

Main Industries Using

Incentives

Requirements

  • Activities must be listed on IPP or
  • 50-70% of production for export
  • 25% of the total project cost in paid up capital
  • Outline of Project
  • Feasibility Report
  • 5yr financial outline

Process

  • Submission of Application
  • Approval by management committee
  • Confirmation by the Board of Governors
  • Certificate of registration and post-registration requirements

The BOI has recently become much more strict in the awarding of incentives for projects. Companies that meet all the requirements may still be rejected simply because BOI would rather see investment in a different area or sector.

Philippine Economic Zone Authority

Any Company Looking to Export should inquire about Locating in a PEZA zone to take full advantage of all the tax benefits the Philippines has to offer.

Legal Entities Which Can Avail

Time to Register

  • Anytime in the first year of operation

Main Industries Using

  • Economic Zone Export Manufacturing Enterprise
  • Information Technology Enterprise
  • Tourism Economic Zone Enterprise

Incentives

  • Income Tax Holiday
  • Exemption from Export Tax
  • Exemption from local tax
  • VAT Zero Rating

Requirements

  • Location of the project in PEZA Zone
  • At least 70% of production for export
  • 25% of the total project cost in paid-up capital or inward remittance
  • Outline of Project
  • Feasibility Report
  • 5yr financial outline

Process

  • Submission of Application
  • Evaluation of Application
  • Presentation to PEZA Board
  • Acceptance
  • Post-registration requirements

Registration can be accomplished very quickly depending on the availability of the PEZA Board. Exact Incentives varying each project at Board’s discretion although companies that comply with PEZA will almost certainly be accepted.

Triple i Consulting has experts on hand to evaluate all projects and determine whether they can comply with PEZA or BOI. Working with our clients to help determine the scope of the project and coordinate with the relevant government agencies for availing. Triple i also provide ongoing PEZA and BOI compliance to ensure that the incentive program is monitored.

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