For foreign and domestic export-oriented enterprises expanding into economic hubs like Cebu and Davao, registering with the Philippine Economic Zone Authority (PEZA) remains a primary route for maximizing tax efficiency. PEZA grants fiscal and non-fiscal incentives to businesses located within designated Special Economic Zones, IT Parks, and IT Buildings.
- Who Qualifies for PEZA Locator Status?
- Export Service Enterprises: BPO companies, IT/software developers, shared service centers, and engineering design firms that export at least 70% of their services.
- Export Manufacturing Enterprises: Factories producing electronic components, medical devices, or automotive parts within an ecozone.
- Ecozone Developers & Logistics Service Providers: Entities operating ecozone facilities or third-party logistics (3PL) support.
- Application Requirements & Process
To apply for PEZA locator status, companies must submit their application to the PEZA Board alongside the following documentation:
- Project Brief & Feasibility Study: Details on investment capital, projected export revenues, 5-year financial projections, and job creation numbers.
- Entity Documents: SEC Certificate of Incorporation, Articles of Incorporation, and By-Laws.
- Site Agreement: Proof of location within a PEZA-accredited IT building or ecozone (e.g., Cebu IT Park, Mactan Economic Zone, or Davao’s accredited IT centers).
- Board Resolution: Designating an authorized representative to deal with PEZA.
- Key Incentives Unlocked
- Income Tax Holiday (ITH): 4 to 7 years of 100% income tax exemption depending on industry tier and location under the Strategic Investment Priority Plan (SIPP).
- Special Corporate Income Tax (SCIT): A 5% SCIT rate on gross income earned in lieu of all national and local taxes upon expiration of the ITH (or chosen outright under CREATE MORE).
- Local Business Tax Exemption: Relief from paying local government taxes during the SCIT period.
Leave a Reply