Tax Alerts
Guidelines on the Transfer of Registration of Existing Registered Business Enterprises (RBEs) in the Information Technology-Business Process Management Sector to Board of Investments (BOI)
(DTI Memorandum Circular No. 22-19, issued on October 18, 2022
FIRB Advisory 008-2022, dated October 19, 2022
PEZA Memorandum Circular No. 2022-067, dated October 21, 2022
PEZA Memorandum Circular No. 2022-070, dated October 24, 2022
Revenue Memorandum Circular No. 142-2022, issued on November 2, 2022)
This Tax Alert is issued to inform all concerned on the guidelines on the transfer of registration of existing Registered Business Enterprises (RBEs) under Information Technology-Business Process Management (IT-BPM) sector from concerned Investment Promotions Agencies (IPAs) to the Board of Investments (BOI).
The following RBEs affected by the work-from-home (WFH) arrangement are allowed to transfer registration to BOI until December 31, 2022:
1. RBEs in the IT-BPM sector that have remaining tax incentives under Sec. 311 of the NIRC, as last amended by CREATE Act; or
2. Those with approved incentives on or before September 14, 2022 under CREATE Act with the concerned IPA.
Deadline of submitting the application forms to PEZA is on or before December 16, 2022, in order to ensure that PEZA will have sufficient time to review the applications before endorsement to BOI. All covered RBEs are encouraged to submit as early as possible. Once transferred, they may implement up to 100% WFH arrangements without their tax incentives being adversely affected.
Transfer of Registration
1. Filing of request
RBEs under IT-BPM sector shall file its request with the concerned IPA using the prescribed Request to Register with BOI Form (Annex A) to itbpm.transfer@peza.gov.ph . For those who already submitted their application to the Office of the Director General (ODG), covered RBEs are required to resubmit their applications. PEZA will not accept hard copies of the applications and attachments.
2. IPA Endorsement to BOI
The concerned IPA shall endorse to the BOI Infrastructure and Services Industries (ISIS) the request of the affected RBEs using the prescribed template IPA List of Endorsed RBEs (Annex B). In addition, the endorsement form shall include scanned copies of the (1) RBE’s original Certificate of Registration with Terms and Conditions of Agreement issued by the concerned IPA and (2) Request to Register with BOI Form accomplished by RBE.
Endorsement of the concerned IPA shall be considered as certification of no-objection on the registration with the BOI and that the RBEs are compliant with the terms and conditions of registration and in good standing.
3. Issuance of BOI Certificate of Registration
BOI ISIS will issue BOI Certificate of Registration to duly endorsed RBEs after compliance with the required endorsement by concerned IPA and payment of RBEs fee amounting to P 2,250.00. The date indicated in the official receipt shall be the date of the effectivity of registration with the BOI.
The BOI Certificate of Registration shall include annotation of the Certificate of Registration issued by the concerned IPA and the original Certificate of Registration issued by the concerned IPA shall likewise include annotation of the BOI Certificate of Registration.
Availment of Tax Incentives
The remaining tax incentives of the covered RBEs shall continuously be administered by the concerned IPA within the corresponding period of entitlement per issued BOI Certificate of Registration. To avail the remaining tax incentives, the covered RBE shall file their application with the concerned IPA. Validation of ITH incentive and issuance of CETI, VAT certifications and other applicable certificates shall still be processed with the concerned IPAs.
Other incentives and non-fiscal incentives being enjoyed by the affected RBEs shall not be affected provided that the registration with the concerned IPA is maintained by the RBE.
After the lapse of period of the remaining tax incentives, existing registered projects by RBEs shall not be entitled to additional incentives unless the activity qualifies as a new investment or qualified expansion under Strategic Investments Priority Plan (SIPP), which requires a separate application for registration.
Movement of Capital Equipment within and outside the Ecozone or Freeport
The covered RBEs shall ensure that the number of laptops/other equipment outside the ecozone or freeport does not exceed the number of its employees under WFH agreement. Additional laptops/equipment may be allowed if reasonably needed to perform the registered project or activity subject to approval of the concerned IPA.
The covered RBEs shall submit the following documents to the concerned IPA within thirty (30) days from the issuance of the BOI Certificate of Registration:
- List of all equipment and/or other assets brought out of the economic or freeport zones and those remaining in the registered facility of the RBE, including the quantity of laptops, desktops, or other assets;
- Acquisition cost, book value, and year of acquisition of the equipment and/or other assets; and
- Total number of employees and number of employees under WFH agreement.
Within five (5) days after the end of each month, covered RBEs shall submit to its concerned IPA a report containing:
- Additional or other equipment or assets brought out of the economic zones; and
- Total number of employees and number of employees under WFH agreement.
No bond, in whatever form, shall be imposed on the movement of capital equipment within and outside the ecozone or freeports.
Cancellation of BOI Certificate of Registration
In case of cancellation of registration, the covered RBEs shall file its request to the concerned IPA for evaluation and assessment of refund/penalties. Upon approval of the concerned IPA, the covered IPA shall surrender its original BOI Certificate of Registration to BOI Legal and Compliance Service and attach the implementing letter of cancellation or endorsement issued by the concerned IPA.
Compliance Requirements and Monitoring
The approval of the Start of Commercial Operations (SCO), submission of reportorial requirements, movement of equipment, applications for Letters of Authority (LOA) including local sales, importation of equipment, transfer of operations, reduction of lease area, disposal of assets, and other PEZA rules and regulations applicable on the operations of the transferee RBEs shall be processed with the concerned IPAs.
The transferee RBEs are still required to maintain an office inside PEZA-registered IT Centers/Buildings. Failure to comply with this mandatory requirement shall result in the cancellation of its registration with PEZA as an IT enterprise and subsequently, its registration with BOI.
Monitoring of RBE’s compliance with the terms and conditions of their registration shall be maintained by the concerned IPA. Any findings of violations decided by the respective agency having jurisdiction of the matters affecting the operations of the project shall be immediately reported by RBE and/or concerned IPA to the BOI.
In addition, the BOI, when necessary, may require the concerned IPA to provide a report on the compliance of the covered RBEs and their tax incentives availment.
Effectivity Date
The Memorandum Circular shall take effect immediately following its publication in newspaper of general circulation.