Part 2 of 2.
Following the discussion on the incentives for Registered Export Enterprises (REEs) and Domestic Market Enterprises (DMEs) under the Create More Act, this article focuses on the period of availment of incentives specifically for projects approved by the Fiscal Incentives Review Board (FIRB) and other Investment Promotion Agencies (IPAs) such as the Board of Investments and Philippine Economic Zone Authority, and the creation of a dedicated taxpayer service division for Registered Business Enterprises (RBEs).
Period of availment
Incentives on income tax holidays, five percent special corporate income tax, duty exemption, value added tax (VAT) exemption on importation and VAT zero-rating on local purchases, granted prior to the Create Act shall continue to be availed until Dec. 31, 2024. Further, REEs will continue to avail of the duty and VAT incentives under the general VAT provisions and customs laws.
For new projects and investments, the period of availment depends on the investment capital, location (within or outside the National Capital Region), and industry priorities (Tiers I, II and III). FIRB will review the grant of incentives for REEs and DMEs with investment capital of above P15 billion while IPAS will review investment capital of P15 billion and below.
The period of availment of incentives granted by the FIRB is four to seven years of income tax holiday, followed by five percent special corporate income tax or enhanced deductions for 20 years up to a maximum period of 27 years while those granted by the IPAS are four to seven years of income tax holiday, followed by five percent special corporate income tax or enhanced deductions for 10 years up to a maximum period of 17 years.
The application for extension for the same project or activity shall only be allowed if the REEs or DMEs maintain or employ at least 10,000 employees, provided that the grant of extension does not exceed more than 10 years and that the grant of extension does not include additional income tax holidays. On the other hand, the application for a qualified expansion project or activity allows 13 years of five percent special corporate income tax or enhanced deduction for projects granted by the FIRB and eight years of five percent special corporate income tax or enhanced deduction for projects granted by the IPAs. Those registered prior to Create may qualify to register on or before Dec. 31, 2024.
The commencement of availment of incentives shall occur within three years from the date of registration.Creation of RBEs Taxpayer Service
Create More introduces the RBEs Taxpayer Service within the Bureau of Internal Revenue (BIR) to provide a separate service that handles and supports RBEs in their end-to-end tax compliance, with the main purpose of implementing a simplified filing and payment process.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants
P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd.
As published in SunStar Cebu, dated December 03, 2024
