Foreign corporations in the Philippines may opt to register with the Philippine Economic Zone Authority or PEZA in order to avail benefits and incentives in the form of tax holidays and exemptions.
PEZA is a government agency attached to the Department of Trade or Industry created to promote investments into the country by assisting investors in registering and facilitating their business operations and providing tax incentives. It also provides assistance to foreign entities in their operations within the different PEZA Special Economic Zone.
The following are the fiscal and non-fiscal incentives given by PEZA to several businesses:
Fiscal Incentives:
- Income Tax Holiday – 100% exemption from Corporate Income Tax
- Upon expiration of Income Tax Holiday, 5% Special Tax on Gross Income and exemption from Local Taxes
- Tax-free importation of raw materials, capital equipment, machineries and spare parts
- Exemption from wharfage dues and export tax, imposts or fees
- VAT zero-rating of local purchases subject to compliance with the requirements of the BIR and the PEZA
- Exemption from payment of any local government imposts, fees, licenses or taxes
- Exemption from Expanded Withholding Tax
Non-Fiscal Incentives
- Simplified Import-Export Procedures
- Special Non-immigrant visa with multiple entry privileges for the following foreign nationals: investors, officers and employees in supervisory, technical or advisor position and their spouses as well as their unmarried children under twenty-one.
- Extended visa facilitation to foreign nationals, their spouses and dependents.
Registration with the PEZA also ensures smoother and easier business operations in the Philippines. Aside from saving on taxes and fees, PEZA registration also ensures the faster acquisition of permits and other registration requirements.
