If you’re planning to invest in the Philippines, one question is always top of mind:
“What tax breaks and incentives can I actually get?”
The good news is that the Board of Investments (BOI) offers some of the most generous tax privileges available under Philippine law. For both local and foreign enterprises, these incentives can significantly reduce operational costs and accelerate return on investment.
As your legal guide, let’s walk through the tax holidays and incentives you’ll enjoy with BOI registration—explained in simple yet precise terms.
1. Income Tax Holiday (ITH)
One of the most sought-after benefits of BOI registration is the Income Tax Holiday (ITH).
Up to 4 years: Standard ITH period for new projects.
Up to 6 years: For projects classified as “pioneer” or located in less developed areas.
Extension possible: Subject to BOI approval, certain projects may receive an ITH extension.
💡 Why this matters: Imagine running your business without paying corporate income tax for several years—freeing up capital for expansion.
2. Duty-Free Importation of Capital Equipment
BOI-registered enterprises may import machinery, spare parts, and raw materials without paying customs duties.
Covers production equipment and related goods.
Allows replacement or modernization of existing machinery.
💡 Lawyer’s Note: To qualify, equipment must be reasonably necessary for the registered project and not locally available at comparable price and quality.
3. VAT Zero-Rating and Exemptions
Certain purchases by BOI-registered enterprises are eligible for VAT zero-rating, particularly if the enterprise is export-oriented.
Zero-rated VAT on local purchases of goods and services.
VAT exemption on importation of qualified equipment and raw materials.
💡 Why this matters: It lowers costs for both imports and domestic procurement.
4. Employment of Foreign Nationals
BOI-registered companies may legally employ foreign nationals in executive, supervisory, or technical positions.
Covers foreign experts essential to operations.
Valid for the duration of the BOI project registration.
💡 Pro Tip: This is especially beneficial for industries requiring specialized knowledge not readily available in the Philippines.
5. Simplified Customs and Import Procedures
BOI incentives go beyond tax breaks—they also streamline government processes.
Priority handling by customs authorities.
Simplified import/export procedures for raw materials and finished goods.
💡 Lawyer’s Note: This reduces bureaucratic delays and keeps your supply chain moving efficiently.
6. Additional Incentives under the CREATE Law
With the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, BOI incentives have been harmonized and enhanced. Depending on project classification, you may enjoy:
Special Corporate Income Tax (SCIT): 5% tax on gross income in lieu of all national and local taxes (for select enterprises).
Enhanced Deductions: Up to 200% of certain expenses (like labor, training, and R&D) may be deducted.
💡 Why this matters: CREATE ensures that BOI incentives remain globally competitive while tailored to national priorities.
Final Thoughts
For businesses serious about investing in the Philippines, BOI registration is not just a legal formality—it is a strategic financial decision. Tax holidays, duty exemptions, VAT zero-rating, and other privileges can create millions in savings over the lifetime of your project.
However, navigating BOI registration and compliance requires careful legal planning. Incentives are granted only to qualified enterprises, and strict conditions must be met to retain them.
Considering BOI registration? Our legal team can assess your eligibility, prepare your application, and ensure you maximize every incentive available under Philippine law. Contact us today and start enjoying your BOI advantage.
Navigating the business landscape in the Philippines can be both rewarding and intricate. Whether you’re embarking on a new venture or scaling up, ensuring that your corporate endeavors are in line with local regulations is paramount.
At CBOS Business Solutions Inc., we pride ourselves on simplifying these processes for our clients. As a seasoned professional services company, we offer comprehensive assistance with SEC Registration, Visa processing, and a myriad of other essential business requirements. Our team of experts is dedicated to ensuring that your business is compliant, well-established, and ready to thrive in the Philippine market.
Why venture into the complexities of business registration and compliance alone? Allow our team to guide you every step of the way. After all, your success is our commitment.
Get in touch today and let us be your partner in achieving your business goals in the Philippines.
Email Address: gerald.bernardo@cbos.com.ph
Mobile No.: +639270032851
You can also click this link to schedule a meeting.
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