The Fiscal Incentives Review Board (Firb), through Firb Resolution 026-2022, agreed to allow the transfer of registered business enterprises (RBEs) in the information technology and business process management (IT-BPM) sector from the Investment Promotion Agency (IPA) administering the economic zone or freeport zone where their project is located (e.g., Peza) to the Board of Investments (BOI) until Dec. 31, 2022.
This was done in response to the call of the IT-BPM sector to adopt long-term flexible work arrangements without adversely affecting their tax incentives. However, the current IPA will continue to be responsible for monitoring the compliance and availment of incentives of the transferees.
The option to transfer registration to the BOI is available to RBEs with remaining tax incentives under Section 311 of the NIRC of 1997, as amended, or those with approved incentives on or before Sept. 14, 2022 under the Create Act with the concerned IPA.
The guidelines for the transfer of registration to the BOI are as follows:
1. RBEs in the IT-BPM sector shall signify to the concerned IPA their intention to transfer to the BOI;
2. The concerned IPA shall prepare an endorsement to the BOI, which shall contain the following basic information:
a) Registration details (certificate of registration, date of registration, and registered activity with corresponding PSIC code)
b) Remaining tax incentives; and
c) Status of compliance with registration terms and conditions;
3. The BOI shall issue the BOI certificate of registration (CR) indicating the remaining tax incentives of the project. The current cost benefit analyses for new projects shall no longer be applied to transferee RBEs; and
4. The concerned IPA shall monitor compliance of transferee RBEs and submit a report to the BOI in relation to the BOI CRs issued.
To facilitate the seamless transition of RBEs in the IT-BPM sector to the BOI, the Firb has also extended the effectivity of Firb Resolution 017-22, which allows 30 percent of the total workforce to work from home, until Dec. 31, 2022.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants