The Philippine government grants regulatory powers to agencies like the Philippine Economic Zone Authority (PEZA) and the Board of Investments (BOI) to administer tax incentives to qualified enterprises. Foreign investors and enterprises can avail of tax incentives and other benefits under any investment laws in the Philippines.
Among the most common tax incentives are administered by PEZA, BOI, CEZA, and TIEZA. The eligibility requirements for these agencies will vary depending on the type of business that foreign investors will engage in.
In forming businesses in the Philippines, there are certain tax incentives available for you. Some of these are discussed below.
PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA)
Foreign enterprises engaged in export manufacturing, IT service export, tourism, and similar business activities, including logistics and warehousing services, economic zone development and operation, facilities providers, and utilities, are eligible to register their company with the Philippines Economic Zone Authority (PEZA), provided they set up their office in one of PEZA’s special economic zones (SEZs). Likewise, it must be classified as an export-oriented enterprise.
PEZA-registered companies are entitled to tax exemptions and other benefits including but not limited to the following:
PEZA Registration Requirements
The requirements for registering with PEZA are as follows. Note that some industries may require additional requirements for submission.
BOARD OF INVESTMENTS (BOI)
Foreign-owned enterprises engaged in export-oriented activities (70-100% export), including outsourcing and offshoring, can register with the BOI. Those engaging in other industries can also register with the BOI if their business activities are among the priority areas for the development of the government or included in BOI’s investment priorities plan (IPP). Additionally, foreign enterprises can be eligible for BOI incentives if they set up their office in one of the areas listed by BOI as Less Developed Areas (LDAs).
There are companies engaging in outsourcing/offshoring, staff leasing/augmentation, information technology – business process outsourcing (IT-BPO), knowledge process outsourcing (KPO), legal process outsourcing (LPO), contact/call center, or back-office.
Tax Incentives Offered by BOI
BOI Registration Requirements
If eligible, foreign enterprises must submit the following to BOI to apply for incentives:
CAGAYAN ECONOMIC ZONE AUTHORITY (CEZA)
Foreign companies engaged in gaming, recreational, tourism-related business activities and sports and recreation-related activities can register their business with CEZA.
CEZA-registered enterprises are entitled to avail of tax incentives provided by PEZA, including zero-rating for articles admitted by CEZA under legal permit. Under Philippine laws, CEZA has the power to issue online gaming licenses to qualified enterprises.
CEZA Registration Requirements
In order to apply for a tax incentive with CEZA, the following requirements listed below are to be submitted:
TOURISM INFRASTRUCTURE AND ENTERPRISE ZONE AUTHORITY (TIEZA)
Foreign enterprises engaged in tourism-related activities as but not limited to travel and tour agencies, restaurants, spas, theme parks, and galleries within the Tourism Enterprise Zone (TEZ) can register their business with TIEZA. The main purpose of their business must be to attract local and foreign tourists to travel to and in the Philippines.
TIEZA Registration Requirements
To be eligible, foreign-owned tourism enterprises must submit the following:
In most circumstances, to avail of the Income Tax Holiday Incentive, it is best that your business is newly formed. As the incentives are provided to start-up businesses or those businesses that are in the infancy stage.
We can assist you with the processing of your Tax Incentive for your business in the Philippines. Don’t hesitate to reach out to us through the following:
Landline: (02) 8478-5826
Mobile: 0917 892 2337
Email: [email protected]