," 
SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENAIE 
S.B. No. ~21 7 
Introduced by: Senator Paolo Benigno "Bam" A. Aquino IV 
AN ACT EXEMPTING START-UP ENTERPRISES FROM TAXES ARISING 
FROM THE FIRST TWO YEARS OF OPERATION 
EXPLANATORY NOTE 
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(0fi.;&.1 t~. j.",.I.r~ 
'14 
IIAY -7 P 1 :30 
The positive economic forecast for the Philippines encburages firms to invest in 
innovation towards the development of new products that would be able to compete in both 
local and foreign markets. 
Start-up enterprises ("Start-ups") have the potential to spur and spread such 
innovation. As these enterprises have likewise the appetite to take on more risks, they would 
fuel creativity and challenge existing ways of doing business. The establishment and growth of 
Start-ups would therefore be beneficial for more Filipinos who have the innate talent for 
. shaping contemporary ideas while working with limited resources. 
A measure to assist Start-ups would help to develop in the maturation of a community 
dedicated to fostering new solutid,ns to ever changing complex problems. 
The Start-Up Business Act proposes a tax exemption for Start Ups for the first two years 
of operation provided that these enterprises are duly registered businesses that are not 
affiliates, subsidiaries or franchises of any existing company and do not have any previous or 
other existing registered businesses. 
This measure encour~ges Start-ups to get organized, and establish their business 
operations and market base. It will give these enterprises the proper time to stand on its own. 
Moreover, this bill recognizes the role of Start-ups in the economy and demonstrates 
the State's commitment to innovation. 
In view of the foregoing, the approval of this bill is earnestly sought. 


, 
SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
'14 
HAY -7 P 1 :30 
SEN!\T~ 
S. B. No. '=! '=! 1 7 
Introduced by: Senator Paolo Benigno "Bam" A. Aquino IV 
AN ACT EXEMPTING START-UP ENTERPRISES FROM TAXES ARISING 
FROM THE FIRST TWO YEARS OF OPERATION 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
1 
SECTION 1. Short Title. - This Act shall be known as the "Start-Up Business Bill". 
2 
SECTION 2. Dec/aration of Policy. -It is hereby declared the policy of the State to foster 
3 
national development and promote inclusive growth by encouraging the creation of enterprises 
4 
that facilitate job creation, production, innovation and trade in the country. To this end, the 
5 
State shall provide incentives to encourage and remove constraints to the start up, incubation, 
6 
and development of enterprises and the proliferation of a more entrepreneurial culture in 
7 
Philippine society. 
8 
SECTION 3. Start-Up Enterprises. - "Start-Up Enterprises" shall refer to newly registered 
9 
businesses engaged in industry, agribusiness and/or services, whether a single proprietorship, 
10 
cooperative, partnership or corporation. 
11 
SECTION 4. Exemption from Taxes and Fees for Start-up Enterprises. - A start-up 
12 
enterprise shall be exempt from all national and local taxes for the first two years of its 
13 
operation, provided that: 
14 
a. The start-up enterprise is not an affiliate, a subsidiary, or a franchise of any existing 
15 
company; 
16 
b. In the case of a sole proprietorship or partnership, the proprietor or the partners of 
17 
the Start-up enterprise shall not have any previous or other existing registered 
18 
companies, partnerships 'or businesses; and 
19 
c. 
In the case of a corporation, each stockholder ofthe start-up enterprise shall have at 
20 
least a five percent (5%) share in stocks and the corporation shall have no nominal 
21 
stockholders or stockholders holding the shares in trust for others. Provided further 
22 
that, all stockholders of the st~rt-up enterprise shall not have held shares of any I 
23 
previous or existing corporation with at least a five percent (5%) share therein, nor 
24 
registered any former or existing sole proprietorship or partnership. 
25 
SECTION 5. Implementing Rules and Regulations. -
The Bureau of Internal Revenue 
26 
(BIR) in coordination with DTI and SEC shall promulgate not later than thirty (30) days upon the 
27 
effectivity of this Act the necessary rules and regulations for its effective implementation. 
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28 
SECTION 6. Separability Clause. -
If any provision of this Act is subsequently declared 
29 
invalid or unconstitutional, other provisions hereof which are not affected thereby shall remain 
30 
in full force and effect. 
31 
SECTION 7. Repealing Clause. -
All laws, acts, presidential decrees, executive orders, 
32 
issuances, presidential proclamations, rules and regulations or parts thereof which are contrary 
33 
to and inconsistent with any provision of this Act are hereby repealed, amended or modified 
34 
accordingly. 
35 
SECTION 8. Effectivity. -
This Act shall take effect fifteen (15) days after its complete 
36 
publication either in the Official Gazette or in at least two (2) newspapers of general circulation. 
37 
Approved, 
3