NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
)
)
SENATE
S. No. ^684
of tl!C g?." ■ C'l.H-v
24 MAY 16 A 8 -17
R'.-CEi’.'lD £ _
Introduced by Senator JUAN MIGUEL F. ZUBIRI
AN ACT
ENHANCING PHILIPPINE TAX INCENTIVES POLICY AND ADMINISTRATION, 
AMENDING FOR THE PURPOSE SECTIONS 27, 28, 32,106,108,109, 112, 292, 
293, 294, 295, 296, 297, 300, 301, 309, AND 311, AND ADDING NEW 
SECTIONS 295-A AND 296-A IN THE NATIONAL INTERNAL REVENUE CODE OF 
1997, AS AMENDED, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for 
Enterprises (CREATE) Act was enacted in 2021 to revitalize and stimulate economic 
growth following the COVID-19 pandemic and to enhance the Philippines' attractiveness 
as an investment destination. It also introduced long overdue reforms to rationalize the 
fiscal incentives regime in the country, making it transparent, performance-based, 
targeted, and time-bound.
The Fiscal Incentives Review Board (FIRB) reported that as of 2023, the CREATE 
Act has incentivized 1,011 registered projects, with an estimated total committed 
investment capital of PHP 1.07 trillion. Despite these gains, there remains significant room 
for improvement, particularly in ensuring consistency in the law and its implementing 
rules and regulations. Additionally, delays and unexplained denials of Value Added Tax 
(VAT) refund claims raise transparency and ease of doing business issues. These 
problems potentially undermine CREATE Act's intended benefits and may dissuade 
existing foreign investors and discourage new ones from even considering the Philippines.
To address these issues, this bill aims to enhance the Philippine tax incentive 
regime, making it more investment-friendly, globally competitive and predictable by 
introducing the following amendments:
1. Enhanced income-based incentive package of up to 30 years, extended duration 
of the enhanced deductions (ED) regime from 5 years to 10 years for domestic 
market enterprises for investment promotion agency (IPA)-approved projects, and 
immediate availment of the special corporate income tax (SCIT) or ED at the start 
of commercial operations.
2. Reduced corporate income tax (CIT) rate of 20% for registered business 
enterprises (RBEs) under the ED regime;
3. Expansion of the ED regime to provide additional relief to RBEs by: (i) doubling 
the additional power expense deduction; (ii) allowing an additional deduction for 
expenses related to approved trade fairs, exhibitions, and missions, and (ii) 
changing the reckoning period of Net Operating Loss Carry Over (NOLCO) to "last 
year of the project's income tax holiday period (ITH);


4. Simplification of local taxation rules for all RBEs by: (i) imposing a uniform RBE 
local tax rate fixed at two percent (2%) based on gross sales in lieu of all local 
taxes, fees, and charges during the ITH and ED period; and (ii) imposition of the 
RBE local tax after the duration of the SCU; and
5. Alternative working arrangements as a business model for RBEs in the IT-Business 
Process Outsourcing or other similar sectors.
To be able to establish clearer policies and properly define taxpayer liabilities, the 
passage of this measure is earnestly sought.
JUAN MIGUEL F. ZUBIRI


NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
Second Regular Session 
)
24 MAY 16 A8 *17
SENATE
S. No.
Introduced by Senator JUAN MIGUEL F. ZUBIRI
AN ACT
ENHANCING PHILIPPINE TAX INCENTIVES POLICY AND ADMINISTRATION, 
AMENDING FOR THE PURPOSE SECTIONS 27, 28, 32, 106,108, 109, 112, 292, 
293, 294, 295, 296, 297, 300, 301, 309, AND 311, AND ADDING NEW 
SECTIONS 295-A AND 296-A IN THE NATIONAL INTERNAL REVENUE CODE OF 
1997, AS AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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Section 1. Section 27 of the National Internal Revenue Code of 1997, as amended,
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is hereby further amended to read as follows;
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"SEC. 27. Rates of Income [t]Tax on Domestic Corporations. -
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(A) In General. - Except as otherwise provided in this Code, an income
5 
tax rate of twenty-five percent (25%) effective July 1, 2020, is hereby imposed
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upon the taxable income derived during each taxable year from all sources
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within and without the Philippines by every corporation, as defined in Section
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22(B) of this Code and taxable under this Title as a corporation, organized in,
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or existing under the laws of the Philippines^:
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"Provided, That corporations with net taxable income not exceeding
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Five million pesos (P5,000,000.00) and with total assets not exceeding One
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hundred million pesos (P100,000,000.00), excluding land on which the
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particular business entity's office, plant, and equipment are situated during the
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taxable year for which the tax is imposed, shall be taxed at twenty percent
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(20%).
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"PROVIDED, FURTHER, THAT REGISTERED DOMESTIC
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MARKET ENTERPRISES UNDER THE ENHANCED DEDUCTIONS
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REGIME PROVIDED IN SECTION 294(C) OF THIS CODE, IS HEREBY
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IMPOSED A TAX RATE EQUIVALENT TO TWENTY PERCENT (20°/o)
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UPON THEIR TAXABLE INCOME DERIVED FROM REGISTERED
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PROJECTS OR ACTIVITIES DURING EACH TAXABLE YEAR."


"xxx"
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SEC. 2. Section 28 of the National Internal Revenue Code of 1997, as amended, is
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hereby further amended to read as follows:
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"SEC. 28. Rates of Income Tax on Foreign Corporations. -
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"(A) Tax on Resident Foreign Corporations.-
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"(1) In General. - Except as otherwise provided in this Code, a
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corporation organized, authorized, or existing under the laws of any foreign
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country, engaged in trade or business within the Philippines, shall be subject
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to an income tax equivalent to twenty-five percent (25%) of the taxable
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income derived in the preceding taxable year from all sources within the
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Philippines effective July 1, 2020H:
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"PROVIDED, THAT REGISTERED DOMESTIC MARKET
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ENTERPRISES UNDER THE ENHANCED DEDUCTIONS REGIME
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PROVIDED IN SECTION 294(C) OF THIS CODE, IS HEREBY IMPOSED
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A TAX RATE EQUIVALENT TO TWENTY PERCENT (20%) UPON THEIR
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TAXABLE INCOME DERIVED FROM REGISTERED PROJECTS OR
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ACTIVITIES DURING EACH TAXABLE YEAR."
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xxx"
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SEC. 3. Section 32 of the National Internal Revenue Code of 1997, as amended, is
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hereby further amended to read as follows:
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"SEC 32. Gross Income. -
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(A) General Definition.- xxx
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(B) Exclusion from Gross Income. - The following items shall not be
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included in THE gross income and shall be exempt from taxation
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under this Title:
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(l)xxx;
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(2) xxx;
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(3) xxx;
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(4) xxx;
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(5) Income Exempt under Treaty. - Income of any kind, to the
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extent required by any treaty obligation, INCLUDING
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DOUBLE TAXATION AGREEMENTS ENTERED INTO BY
34 
THE PRESIDENT WITH 
ECONOMIES AND
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ADMINISTRATIVE REGIONS, 
binding upon the
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Government of the Philippines."


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(6)xxx;and
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(7) XXX."
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SEC. 4. Section 106 of the National Internal Revenue Code of 1997, as amended,
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is hereby further amended to read as follows:
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"SEC 106. Value-Added Tax on Sale of Goods or Properties. -
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"(A) Rate and Base of Tax. - xxx.
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"(1) The term 'goods or propertied xxx;
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"(2) The following sales by VAT-registered persons shall be subject to
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zero percent (0%) rate:
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(a) Export Sales. - The term 'export sales' means:
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(1) The sale and actual shipment of goods from the Philippines
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to a foreign country, irrespective of any shipping
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arrangement that may be agreed upon which may
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influence or determine the transfer of ownership of the
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goods so exported and paid for in acceptable foreign
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currency or its equivalent in goods or services, and
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accounted for in accordance with the rules and regulations
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of the Bangko Sentra! ng Pilipinas (BSP);
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[(3^](2) Sale of raw materials, [or] packaging materials
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AND OTHER GOODS to a non-resident buyer for delivery
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to a resident local export-oriented enterprise to be used in
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manufacturing, processing, packing or repacking in the
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Philippines of the said buyer's goods and paid for in
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acceptable foreign currency and accounted for in
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accordance with the rules and regulations of the BSP;
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[(4)](3) Sale of raw materials, [or] packaging materials AND
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OTHER GOODS to export-oriented enterprise whose
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export sales exceed seventy percent (70%) of total annual
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production;
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[(5-)—Those considered export gdIcs under-Executive Order N07
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226, otherwise known as the-Qmnibus Investment Code of
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1987, and other special laws;-and]
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[(^](4) The sale of goods, supplies, equipment and fuel to
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persons engaged in international shipping or international
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air transport operations: Provided, That the goods.


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supplies, equipment and fuel shall be used for international 
shipping or air transport operations; AND
(7) SALE OF RAW MATERIALS, PACKAGING 
MATERIALS AND OTHER GOODS TO EXPORT- 
ORIENTED ENTERPRISE WHOSE EXPORT SALES IS 
AT LEAST TEN BILLION PESOS 
(PHP10,000,000,000.00), OR ITS FOREIGN 
CURRENCY EQUIVALENT, ON AVERAGE FOR THE 
PRECEDING THREE TAXABLE YEARS AND WHOSE 
EXPORT SALES EXCEED SEVENTY PERCENT (70%) 
OF TOTAL ANNUAL PRODUCTION DULY VERIFIED BY 
INVESTMENT PROMOTION AGENCY, OR THE BOARD 
OF INVESTMENT.
"[Provided, That subparagraphs (3)r</1-)7-and (5) hereof shall 
be subject to the twelve percent (12%) valuc added tax and ne-tenger
be considered-expert sales subject to zero percent (0%) VAT-rate-upon
satisfaction of the following conditions:-
(1) Thc-succossful-cstablishmcnt and implementation of an
enhanced VAT refund system that grants refunds of
cfeditat>ki input tax within ninety (90) days from the-fitifl§
of--thc-VAT refund application-with the Bureaui
That, to-determine the cffcctivity of item no. 1, all
applications filed from January 1, 2018 shall be processed
and must be decided withHi-nincty (90) days from the filing
of the-VAT refund application; oftd 
(3)--AII-peftding VAT refund claims as of December 31, 2017
shall be fully paid in cash-by-Dcccmbcr-31, 2019.]" 
"Provided, That the Department of Finance (DOF) shall 
establish a VAT refund center in the Bureau of Internal Revenue (BIR) 
and in the Bureau of Customs (BOC) that will handle the processing 
and granting of cash refunds of creditable input tax.
"An amount equivalent to five percent (5%) of the total VAT 
collection of the BIR and the BOC from the immediately preceding year 
shall be automatically appropriated annually and shall be treated as a 
special account in the General Fund or as trust receipts for the purpose


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of funding claims for VAT refund: Provided, That any unused fund, at
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the end of the year shall revert to the General Fund:
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"Provided, further, That the BIR and the BOC shall be required
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to submit to the Congressional Oversight Committee on the
5 
Comprehensive Tax Reform Program (COCCTRP) a quarterly report of
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all pending claims for refund and any unused funds.
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(b) Sales to persons or entities whose exemption under special
8 
laws or international agreements to which the Philippines is a signatory
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effectively subjects such sales to zero rate.
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SEC. 5. Section 108 of the National Internal Revenue Code of 1997, as amended,
12 
is hereby further amended to read as follows:
13 
"SEC 108. Vaiue-added Tax on Saie of Services and Use or Lease of
14 
Properties. -
15 
"(A) Rate and Base of Tax. - xxx
16 
"(B) Transactions Subject to Zero Percent (0%) Rate. - The following
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services performed in the Philippines by VAT-registered persons shall
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be subject to zero percent (0%) rate:
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(1) Processing, manufacturing or repacking goods for other
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persons doing business outside the Philippines which goods
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are subsequently exported, where the services are paid for
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in acceptable foreign currency and accounted for in
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accordance with the rules and regulations of the BSP;
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(2) Services other than those mentioned in the preceding
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paragraph, rendered to a person engaged in business
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conducted outside the Philippines or to a non-resident
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person not engaged in business who is outside the
28 
Philippines when the services are performed, the
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consideration for which is paid for in acceptable foreign
30 
currency and accounted for in accordance with the rules
31 
and regulations of the BSP;
32 
(3) Services rendered to persons or entities whose exemption
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under special laws or international agreements to which the
34 
Philippines is a signatory effectively subjects the supply of
35 
such services to zero percent (0%) rate;


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(4) Services rendered to persons engaged in international 
shipping or international air transport operations, including 
leases of property for use thereof: Provided, That these 
services shall be exclusive for international shipping or air 
transport operations;
(5) Services performed by subcontractors and/or contractors in 
processing, converting, or manufacturing goods for an 
enterprise whose export sales exceed seventy percent 
(70%) of total annual production;
(6) Transport of passengers and cargo by domestic air or sea 
vessels from the Philippines to a foreign country; and
(7) Sale of power or fuel generated through renewable sources 
of energy such as, but not limited to, biomass, solar, wind, 
hydropower, geothermal, ocean energy, and other 
emerging energy sources using technologies such as fuel 
cells and hydrogen fuels.
XXX
(10) SERVICES PERFORMED BY SUBCONTRACTORS 
AND/OR CONTRACTORS IN PROCESSING, 
CONVERTING, OR MANUFACTURING GOODS FOR AN 
ENTERPRISE WHOSE EXPORT SALES IS AT LEAST 
TEN BILLION PESOS (PHP10,000,000,000.00), OR 
ITS FOREIGN CURRENCY EQUIVALENT, ON 
AVERAGE FOR THE PRECEDING THREE TAXABLE 
YEARS AND WHOSE EXPORT SALES EXCEED 
SEVENTY PERCENT (70%) OF TOTAL ANNUAL 
PRODUCTION DULY VERIFIED BY INVESTMENT 
PROMOTION AGENCY, OR THE BOARD OF 
INVESTMENTS:
[Provided, That Gubparagraphs-(B)(1) ond (B)(5) hereof shall 
be subject to the twelve percent (12%) value-added tax and no longer
be subject to zero-percent (0%) VAT rate upon satisfaction of the
following conditionst


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(-1)- The succcGsful-c5tQbliGhmefit-and-fmplcmcntotion of on
enhoncGd VAT refund system that grants refends—of
efeditable input tax within ninety-(90-)-doyG from-the-filing
of the VAT refund application with the Bureau: Provided,
That—to-determine the cffcctivity of item no. 1, all
applications filed from^anuary 1, 2018 shall be procegsed
and must be decided within ninety (90) days from the filing
of the VAT refund application; and 
(2) All pending VAT rcfttnd-dalms as of December 31, 2017
shall be fully paid in cash by Dcccmbcr--31/ 20197] 
Provided, That the [Department-of- Finance] DOF shall 
establish a VAT refund center in the [Bureau of Internal Revenue] BIR 
and in the [Bureau-of Gustoms] BOC that will handle the processing 
and granting of cash refunds of creditable input tax.
An amount equivalent to five percent (5%) of the total value- 
added tax collection of the BIR and the BOC from the immediately 
preceding year shall be automatically appropriated annually and shall 
be treated as a special account in the General Fund or as trust receipts 
for the purpose of funding claims for VAT Refund: Provided, That any 
unused fund, at the end of the year shall revert to the General Fund:
Provided, further. That the BIR and the BOC shall be required 
to submit to the COCCTRP a quarterly report of all pending claims for 
refund and any unused fund.
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SEC. 6. Section 109 of the National Internal Revenue Code of 1997, as amended,
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is hereby further amended to read as follows:
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"SEC. 109. Exempt Transactions. — (1) Subject to the provisions of Subsection (2) 
hereof, the following transactions shall be exempt from the value-added tax:
"(DD) IMPORTATION OF RAW MATERIALS, PACKAGING MATERIALS 
AND GOODS OF EXPORT-ORIENTED ENTERPRISE WHOSE GROSS 
ANNUAL EXPORT SALES IS AT LEAST TEN BILLION PESOS 
(PHP10,000,000.00), OR ITS FOREIGN CURRENCY EQUIVALENT, ON 
AVERAGE FOR THE PRECEDING THREE TAXABLE YEARS DULY VERIFIED 
BY THE BOARD OF INVESTMENTS."


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SEC. 7. Section 112 of the National Internal Revenue Code of 1997, as amended,
2 
is hereby further amended to read as follows:
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"SEC. 112. Refunds of Input Tax. -
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"(A) Zero-rated or Effectively Zero-rated Sales. - xxx
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"(B) Cancellation of VAT Registration. - xxx
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"(C) Period within which the Refund of Input Taxes shall be
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Made. - In proper cases, the Commissioner shall grant a refund for
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creditable input taxes within ninety (90) days from the date of
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submission of invoices and other documents PRESCRIBED BY THE
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COMMISSIONER, WHICH SHALL BE DEEMED EXHAUSTIVE
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AND SHALL BE LIMITED TO THOSE REQUIRED BY LAW, in
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support of the application filed in accordance with Subsections (A) and
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(B) hereof: Provided, That for this purpose, the VAT refund claims shall
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be classified into low-, medium-, and high-risk claims, with the risk
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classification based on THE amount of VAT refund claim, tax
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compliance history, frequency of filing VAT refund claims, [among
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Others:] AND OTHER CRITERIA BASED ON REGULAR PUBLIC
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CONSULTATION: PROVIDED, FURTHER, THAT THE BIR SHALL
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ESTABLISH AN EXPEDITED REFUND LANE FOR LOW-RISK
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CLAIMS: Provided, [furthefj] FURTHERMORE, That medium- and
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high-risk claims shall be subject to audit or other verification processes
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in accordance with the[]BIR's national audit program for the relevant
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year: Provided, finally. That should the Commissioner find that the
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grant of refund is not proper, the Commissioner must state in writing
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the legal and factual basis for the denial within the ninety (90)-day
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period AND PROVIDE THE TAXPAYER AT LEAST FIVE (5) DAYS
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TO FILE AND SUBSTANTIATE A REQUEST FOR
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RECONSIDERATION. THE DENIAL SHALL NOT BE FINAL
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UNLESS THE TAXPAYER HAS BEEN PROVIDED THE
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OPPORTUNITY TO REQUEST FOR A RECONSIDERATION.
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PROVIDED, FINALLY, THAT THE TAXPAYER MAY SUBMIT
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SUPPORTING DOCUMENTS AS MAY BE NECESSARY TO
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ADDRESS THE FINDINGS OF THE COMMISSIONER AND IN
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SUPPORT OF THE REQUEST FOR RECONSIDERATION.
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THE REFUND SHALL BE GRANTED IF THE VALIDITY AND 
EXISTENCE OF THE ZERO-RATED SALES AND RELATED 
PURCHASES IN ACCORDANCE WITH THE DOCUMENTS 
SUBMITTED HAVE BEEN ESTABLISHED. IT IS PROHIBITED TO 
ASSESS AND/OR DEDUCT POSSIBLE DEFICIENCY VAT 
ASSESSMENT ON THE REFUND CLAIM.
"In case of full or partial denial of the claim for tax refund, or 
the failure on the part of the Commissioner to act on the application 
within the period prescribed []HEREIN, the taxpayer affected may, 
within thirty (30) days from the receipt of the decision denying the claim 
or after the expiration of the ninety (90)-day period, IN CASES WHERE 
NO ACTION IS MADE BY THE BIR, appeal the decision with the 
Court of Tax Appeals: Provided, however, That failure on the part of any 
official, agent, or employee of the [Bureau-of-Intcrnal Revenue] BIR to 
act on the application within THE ninety (90)-day period shall be 
punishable under Section 269 of this Code.
"(D) Manner of Giving Refund. - Refunds shall be made upon warrants 
drawn by the Commissioner or by his duly authorized representative without 
the necessity of being countersigned by the Chairperson, Commission on Audit 
(COA), the provisions of the Administrative Code of 1987 to the contrary 
notwithstanding: Provided, That refunds under this paragraph shall be subject 
to post audit by the [Commission-on Audit] COA following the risk-based 
classification [ateeve] HEREIN described: PROVIDED, FURTHER, THAT, IN 
CASE OF FULL OR PARTIAL DENIAL OF THE CLAIM FOR TAX REFUND, 
THE COMMISSIONER SHALL PREPARE CERTIFIED COPIES OF ALL 
DOCUMENTS SUBMITTED BY THE TAXPAYER TO BE TRANSMITTED TO 
THE COMMISSION ON AUDIT FOR POST AUDIT PURPOSES AND 
SHALL RETURN ALL DOCUMENTS SUBMITTED TO SUPPORT THE 
CLAIM FOR REFUND TO THE TAXPAYER NO LATER THAN TEN (10) 
DAYS FROM ISSUANCE OF THE DECISION FOR THE FILING OF AN 
APPEAL WITH THE COURT OF TAX APPEALS, IF THE TAXPAYER 
DEEMED WARRANTED. PROVIDED, FURTHERMORE, THAT A 
SIMPLIFIED AND STREAMLINED TAX REFUND SYSTEM FOR 
REGISTERED BUSINESS ENTERPRISES UNDER TITLE XIII OF THIS 
CODE SHALL BE ESTABLISHED IN CONSULTATION WITH THE COA


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AND THE INVESTMENT PROMOTION AGENCIES (IPAs). 
NOTWITHSTANDING RELEVANT LAWS, RULES, AND REGULATIONS 
ON DATA PRIVACY AND CONFIDENTIALITY OF TAXPAYER 
INFORMATION, THE BIR SHALL PUBLISH STATISTICS ON THE 
VOLUME, PROCESSING TIME, AND RATE OF APPROVAL OF REFUND 
CLAIMS, AND OTHER RELEVANT STATISTICS: Provided, [further] 
FINALLY, That in case of disallowance by the [CommisGion on Audit] COA, 
only the taxpayer shall be liable for the disallowed amount without prejudice 
to any administrative liability on the part of any OFFICER OR employee of the 
[Bureau of Internal Rcvcnucj BIR who may be found to be grossly negligent 
in the grant of refund.
"THE EXPEDITED REFUND MECHANISM SHALL REQUIRE 
MINIMAL DOCUMENTARY REQUIREMENTS OR REDUCED 
PROCESSING TIME FROM TAXPAYERS WHO QUALIFY AS LOW-RISK, 
SUBJECT TO THE RULES AND REGULATIONS PRESCRIBED BY THE 
BIR."
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SEC. 8. Section 113 of the National Internal Revenue Code of 1997, as amended,
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is hereby further amended to read as follows:
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"SEC.113. Invoicing and Accounting Requirements for VAT-Registered Persons 
(D)
(3) If a VAT-registered person issues a VAT invoice to another VAT-registered 
person with lacking information required under subsection (B) hereof, the issuer 
shall be liable for non-compliance with the invoicing requirement, however, the 
VAT shall still be allowed to be used as input tax credit on the part of the purchaser 
pursuant to Section 110 of this Code if the lacking information do not pertain to 
the amount of sales, amount of VAT, name and TIN of both the purchaser and 
issuer/seller, description of goods or nature of services, and the date of the 
transaction; PROVIDED THE DESCRIPTION OF GOODS OR NATURE OF 
SERVICES MAY BE ADDRESSED IN A SEPARATE TRACEABLE 
SUPPLEMENTARY DOCUMENTS; PROVIDED FURTHER THE ISSUER OR A 
DULY AUTHORIZED PERSON SHALL BE ALLOWED TO MANUALLY ADD OR 
REVISE THE LACKING OR ERRONEOUS INFORMATION ON INVOICES, 
INCLUDING INVOICES ISSUED USING COMPUTERIZED ACCOUNTING
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SYSTEM, WITHOUT PRIOR NOTIFICATION TO OR APPROVAL FROM THE 
BIR.
(4) IF A VAT-REGISTERED PERSON ISSUES A VAT INVOICE FOR ZERO­
RATED SALES OR EXEMPT SALES WITH LACKING INFORMATION 
REQUIRED UNDER SUBSECTION (B) HEREOF, THE ISSUER SHALL BE 
LIABLE FOR NON-COMPLIANCE WITH THE INVOICING REQUIREMENT, 
HOWEVER, THE INVOICE SHALL STILL BE VALID FOR THE PURPOSE OF 
ESTABLISHGING ZERO-RATED OR EXEMPT SALES IF THE LACKING 
INFORMATION DO NOT PERTAIN TO THE AMOUNT OF SALES, NAME AND 
TIN, WHERE APPLICABLE, OF BOTH THE PURCHASER AND 
ISSUER/SELLER, DESCRIPTION OF GOODS OR NATURE OF SERVICES, 
AND THE DATE OF TRANSACTION; PROVIDED THE DESCRIPTION OF 
GOODS OR NATURE OF SERVICES MAY BE ADDRESSED IN A SEPARATE 
TRACEABLE SUPPLEMENTARY DOCUMENTS; PROVIDED FURTHER THE 
ISSUER OR A DULY AUTHORIZED PERSON SHALL BE ALLOWED TO 
MANUALLY ADD OR REVISE THE LACKING OR ERRONEOUS 
INFORMATION ON INVOICES, INCLUDING INVOICES ISSUED USING 
COMPUTERIZED ACCOUNTING SYSTEM, WITHOUT PRIOR 
NOTIFICATION TO OR APPROVAL FROM THE BIR."
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SEC. 9. Section 292 of the National Internal Revenue Code of 1997, as amended,
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is hereby further amended to read as follows:
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"SEC. 292. Extent of Authority to Grant Tax Incentives. - The ^Fiscal 
Incentives Review Board, or the] Investment Promotion Agencies, {under-a 
detogated-authority from} OR the Fiscal Incentives Review Board, AS THE 
CASE MAY BE, shall grant the appropriate tax incentives provided in this Title fte 
be-granted} to registered business enterprises only to the extent of their 
approved registered project or activity under the Strategic Investment Priority 
Plan.
"MATTERS PENDING WITH THE FISCAL INCENTIVES REVIEW 
BOARD INCLUDING APPLICATIONS FOR REGISTRATION, REQUESTS 
FOR RECONSIDERATION AND APPEAL, SHALL BE IMMEDIATELY 
REFERRED BACK TO THE CONCERNED INVESTMENT PROMOTION 
AGENCY FOR PROPER AND IMMEDIATE RESOLUTION."
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SEC. 10. Section 293 of the National Internal Revenue Code of 1997, as amended,
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is hereby further amended to read as follows:
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"Sec. 293. Definitions. - When used in this Title:
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"xxx
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(F) Freeport zones refer to an isolated and policed [area] AREAS
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adjacent to a port of entry, which shall be operated and managed as a separate
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customs territory FOR VAT AND CUSTOMS DUTY PURPOSES, SUBJECT
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TO THE PROVISIONS OF SECTIONS 295(D) AND (E) AND THE LAST
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PARAGRAPH OF SECTIONS 296 and 296-A OF THIS CODE, to ensure
10 
free flow or movement of goods, except those expressly prohibited by law,
11 
within, into, and exported out of the freeport zone where imported goods may
12 
be unloaded for immediate transshipment or stored, repacked, sorted, mixed,
13 
or otherwise manipulated without being subject to import duties. However,
14 
movement of these imported goods from the free-trade area to a non-free
15 
trade area in the country shall be subject to all applicable internal revenue
16 
taxes and duties: Provided, That for the freeport to qualify as a separate
17 
customs territory, a freeport shall have a permanent customs control or
18 
customs office at its perimeter: PROVIDED, FURTHER, THAT POINTS OF
19 
EXIT OF GOODS FROM THE TERRITORY OF THE FREEPORT ZONES TO
20 
THE OTHER PARTS OF THE PHILIPPINE TERRITORY SHALL BE
21 
CONSIDERED PORTS OF ENTRY AND POLICED AS SUCH, AS MAY BE
22 
DETERMINED BY THEBOC;
23 
"(G) INVESTMENT CAPITAL REFERS TO THE VALUE OF
24 
INVESTMENT INDICATED IN PHILIPPINE CURRENCY, THAT SHALL
25 
BE USED TO CARRY OUT A REGISTERED PROJECT OR ACTIVITY SUCH
26 
AS PRE-OPERATING EXPENSES, COST OF LAND AND LAND
27 
IMPROVEMENTS, BUILDINGS, LEASEHOLD IMPROVEMENTS,
28 
WORKING CAPITAL, AND MACHINERY AND EQUIPMENT,
29 
INVENTORY AND OTHER CURRENT AND NON-CURRENT ASSETS;
30 
"(H) Investment Promotion Agencies (IPAs) refer to government
31 
entities created by law, executive order, decree, or other issuances, in charge
32 
of promoting investments, granting and administering tax and non-tax
33 
incentives, and overseeing the operations of the different economic zones and
34 
freeports in accordance with their respective special laws. These include the
35 
Board of Investments (BOI), [Regional-Board of investments—Autonomotts
12


1 
Region in Muslim Mindonao (RBOI—ARMM)} BANGSAMORO BOARD OF
2 
INVESTMENTS (BBOI), BANGSAMORO ECONOMIC ZONE AUTHORITY
3 
(BEZA), Philippine Economic Zone Authority (PEZA), Bases Conversion and
4 
Development Authority (BCDA), Subic Bay Metropolitan Authority (SBMA),
5 
Clark Development Corporation (CDC), John Hay Management Corporation
6 
(JHMC), Poro Point Management Corporation (PPMC), Cagayan Special
7 
Economic Zone Authority (CEZA), Zamboanga City Special Economic Zone and
8 
Freeport Authority (ZCSEZA), PHIVIDEC Industrial Authority (PIA), Aurora
9 
Pacific Economic Zone Authority (APECO), Authority of the Freeport Area of
10 
Bataan (AFAB), Tourism Infrastructure and Enterprise Zone Authority (TIEZA),
11 
and all other similar existing authorities or that may be created by law unless
12 
otherwise specifically exempted from the coverage of this Code."
13 
XXX."
14 
SEC. 11. Section 294 of the National Internal Revenue Code of 1997, as amended,
15 
is hereby further amended to read as follows:
16 
"SEC. 294. Incentives. - Subject to the conditions and period of
17 
availment in Sections 295, 296, AND 296-A, respectively, the following types
18 
of tax incentives may be granted to registered projects or activities:
19 
"(A) Income Tax Holiday (TTH),
20 
"(B) Special Corporate Income Tax (SCIT) Rate. - For export
21 
enterprise, a tax rate equivalent to 5% [effective July 1, 2020,] based on the
22 
gross income earned, in lieu of all national and local taxes, INCLUDING
23 
LOCAL FEES AND CHARGES, EXCEPT REAL PROPERTY TAX ON LAND
24 
OWNED BY DEVELOPERS.
25 
"XXX
26 
"(C) Enhanced Deductions (ED) REGIME. - For [export enterprise
27 
Qod] domestic market enterprise, the following may be allowed as deductions:
28 
"(1) xxx;
29 
"(2) xxx;
30 
"(3) xxx;
31 
"(4) xxx;
32 
"(5) xxx;
33 
"(6) ONE HUNDRED PERCENT (100%) [Fifty percent (50%)]
34 
additional deduction on power expense incurred in the taxable year;
13


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"(7) Deduction for reinvestment aiiowance to manufacturing 
AND TOURISM industry. - When a manufacturing OR TOURISM 
registered business enterprise reinvests its undistributed profit or 
surplus in any of the projects or activities listed in the Strategic 
Investment Priority Plan, the amount reinvested to a maximum of fifty 
percent (50%) shall be allowed as a deduction from its taxable income 
within a period of five (5) years from the time of such reinvestment; 
[and]
"(8) ONE HUNDRED PERCENT (100%) ADDITIONAL 
DEDUCTION ON EXPENSES RELATING TO TRADE FAIRS, 
EXHIBITIONS OR TRADE MISSIONS; AND
"K^(9) Enhanced Net Operating Loss Carry-Over (NOLCO). - 
The net operating loss of the registered project or activity during the 
first three (3) years from the start of commercial operation, which had 
not been previously offset as deduction from gross income, may be 
carried over as deduction from gross income within the next five (5) 
consecutive taxable years immediately following the LAST year of 
[such loss] OF THE INCOME TAX HOLIDAY ENTITLEMENT 
PERIOD OF THE PROJECT.
"(D) Duty exemption on importation of capital equipment, raw 
materials, spare parts, or accessories; fandj
”(E) []VAT exemption on importation and VAT zero-rating on local
purchases^;
"(F) REGISTERED BUSINESS ENTERPRISE LOCAL TAX. - IN 
LIEU OF ALL LOCAL TAXES, FEES, AND CHARGES IMPOSED BY THE 
LOCAL GOVERNMENT UNIT (LGU), THERE SHALL BE IMPOSED A 
REGISTERED BUSINESS ENTERPRISE LOCAL TAX AT THE RATE OF 
TWO PERCENT (2%) BASED ON THE GROSS SALES OF REGISTERED 
BUSINESS ENTERPRISES DURING THE PERIOD OF THEIR 
AVAILMENT OF INCOME TAX HOLIDAY AND ENHANCED DEDUCTION 
AS PROVIDED UNDER SECTION 294(A) AND (C) OF THIS CODE, 
RESPECTIVELY, EXCEPT DURING THE PERIOD OF SPECIAL 
CORPORATE INCOME TAX, OR UNLESS A LOWER RATE IS IMPOSED 
OR AN EXEMPTION IS GRANTED BY THE CONCERNED LGU OR OTHER
14


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LAWS: PROVIDED, THAT THE REGISTERED BUSINESS ENTERPRISE 
LOCAL TAX SHALL NOT INCLUDE REAL PROPERTY TAX ON LAND 
OWNED BY DEVELOPERS; AND
"(G) SPECIAL VISAS. - AN IPA IS HEREBY AUTHORIZED TO 
ISSUE THE FOLLOWING SPECIAL VISAS:
"(1) SPECIAL SKILLS VISA FOR FOREIGN NATIONALS 
WHO POSSESS HIGHLY SPECIALIZED SKILLS AS 
DETERMINED TO BE NECESSARY OR STRATEGIC BY THE 
CONCERNED IPA IN THE OPERATION OF REGISTERED 
BUSINESS ENTERPRISES; AND
"(2) EXECUTIVE WORKING VISA FOR FOREIGN 
NATIONALS HOLDING EXECUTIVE POSITIONS, INCLUDING 
PRESIDENTS, VICE-PRESIDENTS, TREASURERS, MANAGERS, 
OR THEIR EQUIVALENTS, AND TO NON-RESIDENT ALIENS 
EMPLOYED IN SUPERVISORY, TECHNICAL, AND ADVISORY 
POSITIONS.
"THE CONCERNED IPA AND THE BUREAU OF IMMIGRATION 
SHALL FORMULATE THE NECESSARY GUIDELINES FOR THE 
SUBMISSION AND APPROVAL OF APPLICATIONS, AS WELL AS THE 
MONITORING OF VISA GRANTEES UNDER THIS PARAGRAPH: 
PROVIDED, THAT THE VISA APPLICATION SHALL BE SPONSORED BY 
REGISTERED BUSINESS ENTERPRISES THAT REQUIRE THE 
EXPERTISE OF THE APPLICANTS."
24 
SEC. 12. Section 295 of the National Internal Revenue Code of 1997, as amended,
25 
is hereby further amended to read as follows:
26
27
28
29
30
31
32
33
34
35
"SEC. 295. Conditions of Avaiiment - The AVAILMENT OF tax 
incentives in the preceding Section shall be governed by the following rules
AT THE OPTION OF THE REGISTERED BUSINESS ENTERPRISE:
["(A) The income tax—holiday-shall be followed by the Special 
Gorporate^ficome Tax Rate or Enhanced Deductions;]
(A) FOR REGISTERED EXPORT ENTERPRISES:
(1) 
AN INCOME TAX HOLIDAY SHALL BE FOLLOWED 
BY A SPECIAL CORPORATE INCOME TAX; OR
(2) 
A SPECIAL CORPORATE INCOME TAX 
IMMEDIATELY AT THE START OF COMMERCIAL OPERATIONS.
15


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(B) FOR REGISTERED DOMESTIC MARKET ENTERPRISES:
(1) 
AN INCOME TAX HOLIDAY SHALL BE FOLLOWED 
BY ENHANCED DEDUCTIONS; OR
(2) 
AN ENHANCED DEDUCTIONS IMMEDIATELY AT 
THE START OF COMMERCIAL OPERATIONS.
PROVIDED, THAT THE ELECTED INCENTIVE PACKAGE SHALL 
BE IRREVOCABLE FOR THE ENTIRE DURATION OF ENTITLEMENT TO 
SUCH INCENTIVES UNDER SECTION 296 OF THIS CODE.
[At the option -of the export- cntcrpriGG, the—Special 
Gefporate-Incomc Tax rote or cnhancccl deductions Gholl be granted: Provided,
That in-no-cosc Ghall the cnhoncad-dcductions-be-gfantcd Gimultancously with
the-Spccial-Gorporotc Income Tax.]
"The following conditions for the availment of each enhanced 
[deductions] DEDUCTION shall BE complied with:
"(1) xxx;
"(2) xxx;
"(3) xxx;
"(4) xxx;
"(5) xxx;
"(6) The additional {deduction-} DEDUCTIONS on power 
expense shall only apply to power utilized for the registered project or 
activity;
"(7) xxx;
"(8) THE ADDITIONAL DEDUCTION ON EXPENSES 
RELATING TO TRADE FAIRS, EXHIBITIONS OR TRADE 
MISSIONS SHALL INCLUDE EXPENSES INCURRED IN 
PROMOTING THE EXPORT OF GOODS OR THE PROVISION OF 
SERVICES TO FOREIGN MARKETS APPROVED BY THE 
CONCERNED IPA, WHICH SHALL COVER:
A. EXPENSES INCURRED IN ESTABLISHING, 
MAINTAINING, OR PARTICIPATING IN A TRADE 
FAIR, TRADE EXHIBITION, TRADE MISSION, OR 
TRADE PROMOTION ACTIVITY HELD OR 
CONDUCTED OUTSIDE THE PHILIPPINES, OR A 
TRADE FAIR OR TRADE EXHIBITION APPROVED BY
16


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THE DEPARTMENT OF TRADE AND INDUSTRY AND 
HELD IN THE PHILIPPINES;
B. 
EXPENSES FOR SECURING A SPOT TO SPEAK AT A 
TRADE MISSION OR TRADE PROMOTION ACTIVITY 
IN PARAGRAPH (A);
C. 
EXPENSES FOR THE TRANSPORTATION OF ANY 
SAMPLE FOR USE AT A TRADE MISSION OR TRADE 
PROMOTION ACTIVITY MENTIONED IN 
PARAGRAPH (A);
D. 
EXPENSES FOR THE ENGAGEMENT OF A 
CONSULTANT (NOT BEING A RELATED PARTY OF 
THE APPROVED FIRM OR COMPANY OR AN OFFICER 
OR EMPLOYEE OF SUCH RELATED PARTY) TO 
ORGANIZE A BUSINESS NETWORKING EVENT 
DURING A TRADE MISSION OR TRADE PROMOTION 
ACTIVITY MENTIONED IN PARAGRAPH (A);
E. 
EXPENSES INCURRED IN ESTABLISHING, 
MAINTAINING, OR PARTICIPATING IN A TRADE 
FAIR OR TRADE EXHIBITION HELD OR CONDUCTED 
(WHETHER WHOLLY OR PARTLY) BY MEANS OF 
TELECONFERENCE, VIDEOCONFERENCING, OR ANY 
OTHER ELECTRONIC MEANS OF COMMUNICATION;
F. 
EXPENSES INCURRED FOR THE TRANSPORTATION 
OF ANY SAMPLE TO ANY POTENTIAL CLIENT 
OUTSIDE OF THE PHILIPPINES, FOLLOWING THE 
POTENTIAL CLIENT'S ATTENDANCE AT OR 
PARTICIPATION IN A TRADE FAIR OR TRADE 
EXHIBITION; AND
G. 
EXPORT MARKET DEVELOPMENT EXPENDITURE 
FOR THE CARRYING OUT OF ANY APPROVED 
MARKETING PROJECT.
PROVIDED, THAT ANY AND ALL COSTS BORNE BY THE 
PHILIPPINE GOVERNMENT RELATED TO THE CONDUCT OF 
TRADE FAIRS, EXHIBITIONS, OR TRADE MISSIONS SHALL BE 
EXCLUDED FROM THE COVERAGE OF DEDUCTIBLE EXPENSES.
17


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"[(€)](D) The duty exemption shall only apply to the importation of 
capital equipment, raw materials, spare parts, or accessories ^ircctly-ond 
exclusively used in^ DIRECTLY ATTRIBUTABLE TO the registered project 
or activity by registered business enterprise: Provided, That the following 
conditions are complied with:
"(1) xxx; and
"(2) xxx.
"AN IPA MAY AUTHORIZE THE IMPORTATION OF CAPITAL 
EQUIPMENT, RAW MATERIALS, SPARE PARTS, OR ACCESSORIES 
PENDING ISSUANCE OF THE CERTIFICATE OF REGISTRATION, 
SUBJECT TO THE POSTING OF PERFORMANCE BOND OR BANK 
GUARANTEE EQUIVALENT TO THE TAXES AND DUTIES WAIVED ON 
THE IMPORTED CAPITAL EQUIPMENT, RAW MATERIALS, SPARE 
PARTS, OR ACCESSORIES AND OTHER CONDITIONS AS MAY BE 
DETERMINED BY THE CONCERNED IPA, AND SUBJECT TO 
APPLICABLE RULES TO BE PRESCRIBED BY THE BUREAU OF 
CUSTOMS.
"NO DUTIES SHALL BE IMPOSED ON SUBSEQUENT SALE, 
TRANSFER, OR DISPOSITION OF THE CAPITAL EQUIPMENT, RAW 
MATERIALS, SPARE PARTS, OR ACCESSORIES, WHICH WERE 
GRANTED TAX AND CUSTOMS DUTY EXEMPTION HEREUNDER 
WITHIN the first five (5) years from date of importation: PROVIDED, THAT 
THE approval of the [Investment Promotion Agency} IPA must be secured 
before SUCH [tbe] sale, transfer, or disposition of the capital equipment, raw 
materials, spare parts, or accessories [ which were granted tax and customs 
duty exemption hereunder,] and [stoll-be-allowed] only under the following 
circumstances:
"[(a}^(l) If made to another enterprise availing customs duty
exemption on imported capital equipment, raw materials, spare parts,
or accessories;
"[(b) If made -to—another-ontofpfise—not-availing of duty
exemption on imported capital equipment, raw materials, spare-parts,-
of^accessorios, upon payment-of-any-taxes-and duties due on the-net
book value of the capital-equipment—raw-materials—spare parts, or
accessories to-be-sold;}
18


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Exportation of capital equipment, raw materials, spare 
parts, accessories, source documents, or those required for pollution 
abatement and control; OR
"{-(d)-Proven technical obsolesccncG of the capital equipment,
row materials, spore parts> or accessories; orj
"£(e)j(3) If donated to the Technical Education and Skills 
Development Authority (TESDA), State Universities and Colleges 
(SUCs)[7-©f] THE DEPARTMENT OF EDUCATION (DepEd) [and] 
OR COMMISSION ON HIGHER EDUCATION (CHED)-accredited 
schools: Provided, That the donation shall be exempt from import 
duties and taxes, including donor's tax.
"IN CASE OF THE FOLLOWING SALE, TRANSFER, OR 
DISPOSITION OF TAX AND DUTY-FREE CAPITAL EQUIPMENT, RAW 
MATERIALS, SPARE PARTS, OR ACCESSORIES WITHIN THE FIRST 
FIVE (5) YEARS FROM THE DATE OF IMPORTATION, THERE SHALL BE 
TAXES AND DUTIES ASSESSED BASED ON THE NET BOOK VALUE OR 
SELLING PRICE, WHICHEVER IS HIGHER, OF THE CAPITAL 
EQUIPMENT, RAW MATERIALS, SPARE PARTS OR ACCESSORIES:
"(1) IF MADE TO ANOTHER ENTERPRISE NOT AVAILING 
OF DUTY EXEMPTION ON IMPORTED CAPITAL EQUIPMENT, 
RAW MATERIALS, SPARE PARTS, OR ACCESSORIES; OR
"(2) PROVEN TECHNICAL OBSOLESCENCE OF THE 
CAPITAL EQUIPMENT, RAW MATERIALS, SPARE PARTS, OR 
ACCESSORIES:
"Provided, That if the registered business enterprise sells, transfers, 
or disposes the aforementioned imported items without prior approval, the 
registered business enterprise and the vendee, transferee, or assignee shall 
be solidarily liable to pay twice the amount of the duty exemption that should 
have been paid during its importation: Provided, further. That the sale, 
transfer, or disposition of the capital equipment, raw materials, spare parts, or 
accessories made after five (5) years from date of importation shall require 
that prior notice be given by the registered business enterprise to the 
[Investment Promotion Agency} IPA: Provided, [finally] FURTHERMORE, 
That even if the sale, transfer, or disposition of the capital equipment, raw 
materials, spare parts or accessories was made after five (5) years from date 
of importation with notice to the [Investment Promotion Agency] IPA, the
19


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registered business enterprise is still liable to pay the duties based on the net 
book value of the capital equipment, raw materials, spare parts, or accessories 
if it has violated any of its registration terms and conditions^: PROVIDED, 
FINALLY, THAT NET BOOK VALUE AS USED IN THIS SECTION SHALL 
REFER TO HISTORICAL COST LESS ACCUMULATED DEPRECIATION, 
AS APPEARING IN THE BOOKS OF ACCOUNTS OR FINANCIAL 
STATEMENTS, AND DETERMINED IN ACCORDANCE WITH ACCEPTED 
ACCOUNTING STANDARDS AND APPROVED BY THE BIR.
"[(^](E) The VAT exemption on importation and VAT zero-rating on 
local purchases shall only apply to goods and services {■dtreetly-and-exctaslvcty 
ttscd in] DIRECTLY ATTRIBUTABLE TO the registered project or activity 
fby} OF a registered business enterprise,^ SUBJECT TO THE FOLLOWING 
RULES:
"(1) SALE OF GOODS AND/OR SERVICES BY A VAT- 
REGISTERED SELLER TO REGISTERED EXPORT 
ENTERPRISES, REGARDLESS OF LOCATION, SHALL BE 
SUBJECT TO ZERO PERCENT (0%) VAT;
"(2) SALE OF GOODS AND/OR SERVICES BY A NON-VAT 
REGISTERED SELLER TO REGISTERED EXPORT 
ENTERPRISES, REGARDLESS OF LOCATION, SHALL BE 
EXEMPT FROM VAT;
"(3) SUBSEQUENT SALE, TRANSFER, OR DISPOSAL OF 
PREVIOUSLY VAT-EXEMPT IMPORTED CAPITAL EQUIPMENT, 
RAW MATERIALS, SPARE PARTS, AND ACCESSORIES WITHIN 
THE FIRST FIVE (5) YEARS FROM THE DATE OF THE 
ORIGINAL SALE SHALL BE SUBJECT TO TWELVE PERCENT 
(12%) VAT BASED ON THE NET BOOK VALUE OR SELLING 
PRICE, WHICHEVER IS HIGHER, OF THE CAPITAL 
EQUIPMENT, RAW MATERIALS, SPARE PARTS, OR 
ACCESSORIES, UNLESS THE SALE IS MADE UNDER THE 
FOLLOWING CIRCUMSTANCES, WHICH SHALL BE SUBJECT 
TO ZERO PERCENT (0%) VAT;
A. 
MADE TO ANOTHER REGISTERED EXPORT 
ENTERPRISE;
B. 
EXPORTATION OF CAPITAL EQUIPMENT, RAW 
MATERIALS, SPARE PARTS, ACCESSORIES, SOURCE
20


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DOCUMENTS, OR THOSE REQUIRED FOR 
POLLUTION ABATEMENT AND CONTROL; AND 
C. IF DONATED TO THE TESDA, SUCs, OR DEPED AND 
CHED-ACCREDITED SCHOOLS: PROVIDED, THAT 
THE DONATION SHALL BE EXEMPT FROM IMPORT 
DUTIES AND TAXES, INCLUDING DONOR'S TAX.
"(4) SALE OF GOODS AND/OR SERVICES TO A DOMESTIC 
MARKET ENTERPRISE, WHETHER REGISTERED OR 
UNREGISTERED AND REGARDLESS OF LOCATION, SHALL BE 
SUBJECT TO TWELVE PERCENT (12%) VAT: PROVIDED, 
HOWEVER, THAT THE VAT EXEMPTION ON IMPORTATION 
AND VAT ZERO-RATING ON LOCAL PURCHASES MAY BE 
GRANTED TO REGISTERED DOMESTIC MARKET 
ENTERPRISES WHEN THE BUSINESS ENTERPRISE HAS AN 
INVESTMENT CAPITAL EXCEEDING FIFTEEN BILLION PESOS 
(PHP15,000,000,000.00) OR AN ANNUAL COMMITTED 
EXPORT SALES OF AT LEAST ONE HUNDRED MILLION US 
DOLLARS (US$100,000,000.00) OR ITS EQUIVALENT IN AN 
ACCEPTABLE FOREIGN CURRENCY: PROVIDED, FURTHER, 
THAT THE THRESHOLD AMOUNTS PROVIDED HEREIN MAY BE 
INCREASED BY THE FISCAL INCENTIVES REVIEW BOARD.
"PROVIDED, FURTHERMORE, THATIHE LOCAL SALES OF 
GOODS AND/OR SERVICES BY A REGISTERED BUSINESS 
ENTERPRISE, REGARDLESS OF LOCATION, MARKET 
ORIENTATION, OR REGISTRATION STATUS, SHALL BE 
SUBJECT TO TWELVE PERCENT (12%) VAT.
"PROVIDED, FINALL Y, THAT AS A CONDITION FOR THE 
AVAILMENT OF VAT INCENTIVES HEREIN GRANTED, ALL 
REGISTERED BUSINESS ENTERPRISES SHALL REGISTER AS 
VAT TAXPAYERS.
"Notwithstanding the provisions in the preceding paragraphs, sales 
receipts and other income derived from non-registered project or activity shall 
be subject to appropriate taxes imposed under this Code.
"[(E)](F) XXX 
"[(F)](G) xxx;
"[(G)](H) xxx; AND
21


'■c
1 
"(I) UNLESS EXEMPT UNDER OTHER LAWS, THE REGISTERED
2 
BUSINESS ENTERPRISE LOCAL TAX SHALL BE IMPOSED ON
3 
REGISTERED BUSINESS ENTERPRISES DURING THE PERIOD OF
4 
INCOME TAX HOLIDAY AND THE ENHANCED DEDUCTION REGIME."
5 
"THE TAX SHALL BE DIRECTLY REMITTED BY THE
6 
REGISTERED BUSINESS ENTERPRISE TO THE TREASURER'S OFFICE
7 
OF THE MUNICIPALITY OR CITY WHERE THE ENTERPRISE IS
8 
LOCATED."
9 
"WHERE TWO (2) OR MORE LGUs COVER THE SAME
10 
ENTERPRISE, THE SHARING BETWEEN SUCH LGUs SHALL BE AS
11 
FOLLOWS:"
12 
(1) 
"FIFTY PERCENT (50%) OF REVENUES SHALL BE
13 
SHARED EQUALLY AMONG THELGUs; AND"
14 
(2) 
"FIFTY PERCENT (50%) OF REVENUES SHALL BE
15 
APPORTIONED BASED ON THE POPULATION OF THELGUs."
16 
"LGUs MAY REDUCE OR WAIVE THE RATE OF TAX, OR THEIR
17 
SHARE THEREOF IN THE CASE OF TWO (2) OR MORE LGUs COVERING
18 
THE SAME ENTERPRISE."
19 
"Registered business enterprises, whose performance commitments
20 
include job generation, shall maintain their employment levels to the extent
21 
practicable, and in the case of reduced employment or when the performance
22 
commitment for job generation is not met, the registered business enterprises
23 
must submit to their respective Investment Promotion Agencies and the Fiscal
24 
Incentives Review Board their justification for the same."
25
26 
SEC. 13. A new section designated as Section 295-A is hereby inserted in the
27 
National Internal Revenue Code of 1997, as amended which shall read as follows:
28 
"SEC. 295-A. REGISTERED BUSINESS ENTERPRISES
29 
TAXPAYER SERVICE. - THERE IS HEREBY CREATED A SEPARATE
30 
SERVICE OR UNIT WITHIN THE BIR FOR REGISTERED BUSINESS
31 
ENTERPRISES. THE COMMISSIONER 
SHALL PRESCRIBE THE
32 
MANNER AND PLACE OF FILING OF RETURNS AND PAYMENTS OF
33 
TAXES BY REGISTERED BUSINESS ENTERPRISES THROUGH THE
34 
SAID SERVICE OR UNIT. FOR EASE OF COMPLIANCE WITH TAX
22


‘ f 0t>. « 
: ■
1 
RULES AND REGULATIONS, SIMPLIFIED 
FILING 
AND PAYMENT
2 
PROCESSES SHALL BE IMPLEMENTED FOR REGISTERED BUSINESS
3 
ENTERPRISES."
4 
SEC. 14. Section 296 of the National Internal Revenue Code of 1997, as
5 
amended, is hereby further amended to read as follows:
6 
"SEC. 296. Period ofAvaitment OF INCENTIVES FOR PROJECTS OR
1 
ACTIVITIES APPROVED BY THE IPAs. - The period of availment of
8 
{incentive] INCENTIVES GRANTED by the IPAs TO registered business
9 
enterprises shall be as follows:
10 
"(A) For export enterprise, income tax holiday of four (4) to seven (7)
11 
years, depending on location and industry priorities as specified in this Section,
12 
and followed by special corporate income tax rate for ten (10) yearsH/ OR
13 
SPECIAL CORPORATE INCOME TAX RATE FOR A MAXIMUM PERIOD
14 
OF FOURTEEN (14) TO SEVENTEEN (17) YEARS, DEPENDING ON
15 
LOCATION AND INDUSTRY PRIORITIES, EXCEPT WHEN GRANTED BY
16 
THE FISCAL INCENTIVES REVIEW BOARD UNDER SECTION 296-A OF
17 
THIS TITLE: PROVIDED, THAT REAPPLICATION FOR INCENTIVES
18 
SHALL NOT BE ALLOWED FOR THE SAME REGISTERED PROJECT OR
19 
ACTIVITY.
20 
{"A qualified expansion or-entirely-new-project-or activity-r-cgistcrcd
21 
under this Act may qualify to avail-ef inccntives7-subjcct-t-o-thc quolifications
22 
set-forth-in-thc Strategic Investment Priority Plan and performance review by
23 
the Rscol Incentives ReviewHBoardi-ProvidedT-That-exiGting-registered projects
24 
or activities prior to ttKMrffectivity-of-4his--A€t-3T=H3y-^Qlify to register and avail
25 
of-the- fncentives granted under this Act for the prescribed period, subject to
26 
the criteria and conditions set forth in-the Strategic-^fivestmcnt Priority Plan;}
27 
"xxx
28 
"(B) For domestic market enterprise under the Strategic Investment
29 
Priority Plan, income tax holiday for four (4) to seven (7) years followed by
30 
enhanced deductions for [five (5)] TEN (10) yearsH/ OR ENHANCED
31 
DEDUCTIONS FOR A MAXIMUM PERIOD OF FOURTEEN (14) TO
32 
SEVENTEEN (17) YEARS, DEPENDING ON LOCATION AND INDUSTRY
33 
PRIORITIES, EXCEPT WHEN GRANTED BY THE FISCAL INCENTIVES
34 
REVIEW BOARD UNDER SECTION 296-A OF THIS TITLE: PROVIDED,
35 
THAT REAPPLICATION FOR INCENTIVES SHALL NOT BE ALLOWED
36 
FOR THE SAME REGISTERED PROJECT OR ACTIVITY.
23


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
"PROVIDED, THAT [A] a qualified expansion or entirely new project 
or activity registered under this Act may qualify to avail of incentives, subject 
to the qualifications set forth in the Strategic Investment Priority Plan and 
performance review by the Fiscal Incentives Review Board. [:- Provided, JhdX. 
existing registered projects or-activities prior to the cffcctivity of this -Act-may
quolify-to-rogistor and avail of the incentives-granted under this Act for the
prescribed—period, subject to the criteria and conditions set forth in the
Strategic Investment-Priority Plan.]
"The period of availment of the foregoing incentives shall commence 
from the actual start of commercial operations with the registered business 
enterprise availing of the tax incentives within three (3) years from the date of 
registration, unless otherwise provided in the Strategic Investment Priority Plan 
and its corresponding guidelines. [Provided, That after the expiration of the 
transitory period under Section 311 (C), export enterprises registered-pfior-te
the cffcctivity of this Act shall have-thc-optioTHte-reapply and avail of the
mcentives-granted under Section 294(B) for the-samG-period provided under
this-Scction, subject to the conditions and-qualifications-sct-forth in the
Strategic -Investment Priority Plon and-performance review by the-Fiscal
Incentives Review Board.]
"xxx
"(3) Tier III activities shall include (i) research and development 
resulting in demonstrably significant value-added, higher productivity, 
improved efficiency, breakthroughs in science and health, and high-paying 
jobs; (ii) generation of new knowledge and intellectual property registered 
and/or licensed in the Philippines; (iii) commercialization of patents, industrial 
designs, copyrights and utility models owned or co-owned by a registered 
business enterprise; (iv) highly technical manufacturing; or (v) are critical to 
the structural transformation of the economy and require substantial catch-up 
efforts, INCLUDING BUT NOT LIMITED TO CYBER-SECURITY, 
ARTIFICIAL INTELLIGENCE, DATA-CENTER FACILITIES, AND 
TOURISM-RELATED PROJECTS OR ACTIVITIES;
"The period of availment of incentives based on the combination of 
both location and industry priorities, as determined in the strategic investment 
priority plan, shall be as follows:
For exporters:
24


2
3
4
5
6
7
8 
9
10
11
12
Location/Industry
Tiers
Tier I
Tier II
Tier III
National
Capital Region
4 UH + 10 
SCU, OR 14 
SCIT
5 ITH + 10
SCIT, OR 15
SCIT
6 ITH + 10
SCIT, OR 16
SCIT
Metropolitan 
areas or areas 
contiguous 
and adjacent 
to the National
Capital Region
5 ITH + 10
SCIT OR 15 
SCIT
6 ITH + 10
SCIT, OR 16
SCIT
7 ITH + 10
SCIT, OR 17
SCIT
All other areas
6 ITH + 10 
SCIT, OR 16
SCIT
7 ITH + 10
SCIT, OR 17
SCIT
7 ITH + 10
SCIT, OR 17
SCIT
For domestic market activities:
Location/Industry
Tiers
Tier I
Tier II
Tier III
National
Capital Region
4 ITH + [5]
10
ED, OR [9]
14 ED
5 ITH + [S] 10
ED, OR 15 ED
6 ITH + [5] 10
ED, OR 16 ED
Metropolitan 
areas or areas 
contiguous 
and adjacent 
to the National
Capital Region
5 ITH + [5]
10
ED, OR 15 ED
6 ITH + [5] 10
ED, OR 16 ED
7 ITH + [5] 10
ED, OR 17 ED
All other areas
6 ITH + [5]
10
ED, OR 16 ED
7 ITH + [5] 10
ED, OR 17 ED
7 ITH + [5] 10
ED, OR 17 ED
"In addition to the incentives provided in tiers above, projects or 
activities of registered enterprises located in areas recovering from armed 
conflict or a major disaster, as determined by the Office of the President, shall 
be entitled to two (2) additional years of income tax holiday.
"xxx
"The industry and locational prioritization specified herein shall be 
subject to review and revision every three (3) years in accordance with the 
Strategic Investment Priority Plan, subject to the standards in Section 300 
hereof or in exceptional circumstances, to attract substantial investment to 
respond to a situation or crisis or to target specific industries:"
25


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26 
27
"PROVIDED, THAT REGISTERED BUSINESS ENTERPRISES 
THAT CONTINUE TO MEET THE TERMS AND CONDITIONS OF THEIR 
REGISTRATION WITH THEIR RESPECTIVE IPAs MAY AVAIL OF THE 
DUTY EXEMPTION ON IMPORTATION OF CAPITAL EQUIPMENT, RAW 
MATERIALS, SPARE PARTS, OR ACCESSORIES, VAT EXEMPTION ON 
IMPORTATION FOR THE ENTIRE REGISTRATION PERIOD:
"PROVIDED, FURTHER, THAT REGISTERED BUSINESS 
ENTERPRISES MAY AVAIL OF THE VAT ZERO-RATING ON LOCAL 
PURCHASES AND VAT EXEMPTION ON IMPORTATION FOR THE 
ENTIRE REGISTRATION PERIOD WITH THE IPA IF THE FOLLOWING 
REQUIREMENTS ARE MET:
(1) 
FOR REGISTERED EXPORT ENTERPRISES, 
MAINTAIN AT LEAST SEVENTY PERCENT (70%) OF TOTAL 
ANNUAL PRODUCTION OR OUTPUT AS EXPORT SALES AND 
CONTINUE TO MEET THE TERMS AND CONDITIONS OF THEIR 
REGISTRATION; AND
(2) 
FOR REGISTERED DOMESTIC MARKET 
ENTERPRISES, SATISFY THE INVESTMENT CAPITAL OR 
EXPORT REQUIREMENT UNDER SECTION 295(E)(4) OF THIS 
CODE FOR THE IMMEDIATELY PRECEDING YEAR AND 
CONTINUE TO MEET THE TERMS AND CONDITIONS OF THEIR 
REGISTRATION:
"PROVIDED, FINALLY, THAT THE AVAILMENT PERIOD OF DUTY 
EXEMPTION ON IMPORTATION OF CAPITAL EQUIPMENT, RAW 
MATERIALS, SPARE PARTS, OR ACCESSORIES, VAT EXEMPTION ON 
IMPORTATION, AND VAT ZERO-RATING ON LOCAL PURCHASES 
SHALL BE RECKONED FROM THE DATE OF REGISTRATION."
28 
SEC. 15. A new section designated as Section 296-A is hereby inserted in the
29 
National Internal Revenue Code of 1997, as amended which shall read as follows:
30 
"SEC. 296-A. PERIOD OF A VAILMENT OF INCENTIVES FOR
31 
PROJECTS OR ACTIVITIES APPROVED BY THE FISCAL INCENTIVES
32 
REVIEW BOARD. - THE PERIOD OF AVAILMENT OF INCENTIVES
33 
GRANTED BY THE FISCAL INCENTIVES REVIEW BOARD TO
34 
REGISTERED BUSINESS ENTERPRISES SHALL BE AS FOLLOWS:
26


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
"(A) FOR EXPORT ENTERPRISE, INCOME TAX HOLIDAY OF 
SEVEN (7) TO TEN (10) YEARS, DEPENDING ON LOCATION AND 
INDUSTRY PRIORITIES AS SPECIFIED IN THIS SECTION, AND 
FOLLOWED BY SPECIAL CORPORATE INCOME TAX RATE FOR 
TWENTY (20) YEARS, OR SPECIAL CORPORATE INCOME TAX RATE 
FOR A MAXIMUM PERIOD OF TWENTY-SEVEN (27) TO THIRTY (30) 
YEARS, DEPENDING ON LOCATION AND INDUSTRY PRIORITIES.
"(B) FOR DOMESTIC MARKET ENTERPRISE, INCOME TAX 
HOLIDAY OF SEVEN (7) TO TEN (10) YEARS, FOLLOWED BY 
ENHANCED DEDUCTIONS FOR TWENTY (20) YEARS, OR ENHANCED 
DEDUCTIONS FOR A MAXIMUM PERIOD OF TWENTY-SEVEN (27) TO 
THIRTY (30) YEARS, DEPENDING ON LOCATION AND INDUSTRY 
PRIORITIES:
"PROVIDED, THAT A QUALIFIED EXPANSION OR ENTIRELY 
NEW PROJECT OR ACTIVITY REGISTERED UNDER THIS ACT MAY 
QUALIFY TO AVAIL OF INCENTIVES, SUBJECT TO THE 
QUALIFICATIONS SET FORTH IN THE STRATEGIC INVESTMENT 
PRIORITY PLAN AND PERFORMANCE REVIEW BY THE FISCAL 
INCENTIVES REVIEW BOARD.
"THE PERIOD OF AVAILMENT OF THE FOREGOING 
INCENTIVES SHALL COMMENCE FROM THE ACTUAL START OF 
COMMERCIAL OPERATIONS WITH THE REGISTERED BUSINESS 
ENTERPRISE AVAILING OF THE TAX INCENTIVES WITHIN THREE (3) 
YEARS FROM THE DATE OF REGISTRATION, UNLESS OTHERWISE 
PROVIDED IN THE STRATEGIC INVESTMENT PRIORITY PLAN AND 
ITS CORRESPONDING GUIDELINES.
THE PERIOD OF AVAILMENT OF INCENTIVES BASED ON THE 
COMBINATION OF BOTH LOCATION AND INDUSTRY PRIORITIES, AS 
DETERMINED IN THE STRATEGIC INVESTMENT PRIORITY PLAN, 
SHALL BE AS FOLLOWS:
31
FOR EXPORTERS:
LOCATION/INDUSTRY
TIERS
TIER I
TIER II
TIER III
NATIONAL
CAPITAL REGION
7 ITH +
20
8 ITH + 20 
SCIT, OR 28
9 ITH + 20 
SCIT, OR 29
27


SCIT, OR 
27 SCIT
SCIT
SCIT
METROPOLITAN
AREAS OR AREAS 
CONTIGUOUS
AND ADJACENT
TO THE NATIONAL 
CAPITAL REGION
8 ITH +
20
SCIT, OR 
28 SCIT
9 ITH + 20 
SCIT, OR 29 
SCIT
10 ITH + 20 
SCIT OR 30 
SCIT
ALL OTHER AREAS
9 ITH +
20
SCIT, OR 
29 SCIT
10 ITH + 20 
SCIT, OR 30 
SCIT
10 ITH + 20 
SCIT, OR 30 
SCIT
FOR DOMESTIC MARKET ACTIVITIES:
LOCATION/INDUSTRY
TIERS
TIER I
TIER II
TIER III
NATIONAL
CAPITAL REGION
7 ITH +
20
ED, OR
27 ED
8 ITH + 20
ED, OR 28 ED
9 ITH + 20
ED, OR 29 ED
METROPOLITAN
AREAS OR AREAS 
CONTIGUOUS
AND ADJACENT
TO THE NATIONAL 
CAPITAL REGION
8 ITH +
20
ED, OR
28 ED
9 ITH + 20
ED, OR 29 ED
10 ITH + 20
ED, OR 30 ED
ALL OTHER AREAS
9 ITH +
20
ED, OR
29 ED
10 ITH + 20
ED, OR 30 ED
10 ITH + 20
ED, 30 ED
2
3
4
5
6
7
8 
9
10
11
"THE ADDITIONAL YEARS OF INCOME TAX HOLIDAY 
PROVIDED UNDER SECTION 296 OF THIS CODE MAY ALSO BE 
GRANTED TO REGISTERED BUSINESS ENTERPRISES AVAILING OF 
INCENTIVES UNDER THIS SECTION:
"PROVIDED, THAT REGISTERED BUSINESS ENTERPRISES 
THAT CONTINUE TO MEET THE TERMS AND CONDITIONS OF THEIR 
REGISTRATION WITH THEIR RESPECTIVE IPAs MAY AVAIL OF THE 
DUTY EXEMPTION ON IMPORTATION OF CAPITAL EQUIPMENT, RAW 
MATERIALS, SPARE PARTS, OR ACCESSORIES, VAT EXEMPTION ON 
IMPORTATION FOR THE ENTIRE REGISTRATION PERIOD:
28


1 
"PROVIDED, FURTHER, THAT REGISTERED BUSINESS
2 
ENTERPRISES MAY AVAIL OF THE VAT ZERO-RATING ON LOCAL
3 
PURCHASES AND VAT EXEMPTION ON IMPORTATION FOR THE
4 
ENTIRE REGISTRATION PERIOD WITH THE IPA IF THE FOLLOWING
5 
REQUIREMENTS ARE MET:
6 
1. FOR REGISTERED EXPORT ENTERPRISES, MAINTAIN AT
7 
LEAST SEVENTY PERCENT (70%) OF TOTAL ANNUAL
8 
PRODUCTION OR OUTPUT AS EXPORT SALES AND
9 
CONTINUE TO MEET THE TERMS AND CONDITIONS OF
10 
THEIR REGISTRATION; AND
11 
2. FOR REGISTERED DOMESTIC MARKET ENTERPRISES,
12 
SATISFY THE INVESTMENT CAPITAL OR EXPORT
13 
REQUIREMENT UNDER SECTION 295(E)(4) OF THIS CODE
14 
FOR THE IMMEDIATELY PRECEDING YEAR AND CONTINUE
15 
TO MEET THE TERMS AND CONDITIONS OF THEIR
16 
REGISTRATION:
17 
"PROVIDED, FINALLY, THAT THE AVAILMENT PERIOD OF DUTY
18 
EXEMPTION ON IMPORTATION OF CAPITAL EQUIPMENT, RAW MATERIALS,
19 
SPARE PARTS, OR ACCESSORIES, VAT EXEMPTION ON IMPORTATION, AND
20 
VAT ZERO-RATING ON LOCAL PURCHASES SHALL BE RECKONED FROM THE
21 
DATE OF REGISTRATION.
22
23 
SEC. 16. Section 297 of the National Internal Revenue Code of 1997, as amended,
24 
is hereby further amended to read as follows:
25 
"SEC. 297. Expanded Functions of the Fiscal Incentives Review Board. -
26 
The functions and powers of the Fiscal Incentives Review Board created under
27 
Presidential Decree No. 776, as amended, shall be expanded as follows:
28 
"(A) To exercise policy making and oversight functions on the
29 
administration and grant of tax incentives by the Investment Promotion
30 
Agencies and other government agencies administering tax incentives. In
31 
particuiar, the Fiscal Incentives Review Board shall:
32 
"(1) Determine the target performance metrics as conditions to
33 
avail of tax incentives;
34 
"(2) Review and [attdit]MONITOR the compliance of IPAs AND
35 
other government agencies administering tax incentives, with respect
36 
to the administration and grant of tax incentives and impose sanctions
29


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
such as, but not limited to, withdrawal, suspension, or cancellation of 
their AUTHORITY [power] to grant tax incentives UNDER THIS 
TITLE, WITHOUT PREJUDICE TO THE FILING OF 
APPROPRIATE CRIMINAL AND ADMINISTRATIVE CASES 
AGAINST ERRING OFFICIALS AND EMPLOYEES IN 
ACCORDANCE WITH THE PROCEDURES PRESCRIBED UNDER 
EXISTING LAWS;
"(3) [Determine the minimum contiguous land-afoa-thot-vortical
economic zones should comply..with] RECOMMEND TO THE
PRESIDENT STANDARDS FOR PROCLAIMING ECONOMIC 
ZONES;
"(4) Conduct reguiar monitoring and evaluation of investment 
and non-investment tax incentives, such as using cost-benefit analysis 
(CBA) to determine their impact on the economy and whether agreed 
performance targets are met; and
"(5) Check and verify, as necessary, the compliance of registered 
business enterprises with the terms and conditions of their availment, 
in particular the agreed target performance metrics, rules and 
regulations of this Act, and other reievant laws or issuances, AND 
IMPOSE, AFTER DUE PROCESS, FINES NOT EXCEEDING ONE 
HUNDRED THOUSAND PESOS (Phpl00,000.00) FOR ANY 
WILLFUL VIOLATIONS: PROVIDED, THAT NO FINES OR 
PENALTIES SHALL BE IMPOSED ON REGISTERED BUSINESS 
ENTERPRISES THAT MERELY RELIED IN GOOD FAITH ON THE 
REPRESENTATIONS OF THE IPAs, UNLESS THE CONTRARY IS 
ESTABLISHED: PROVIDED, FURTHER, THAT COLLECTIONS 
FROM THE PENALTIES HEREIN IMPOSED SHALL ACCRUE TO 
THE GENERAL FUND.
"FOR THIS PURPOSE, ALL IPAs AND OTHER GOVERNMENT 
AGENCIES ADMINISTERING TAX INCENTIVES SHALL FURNISH THE 
FISCAL INCENTIVES REVIEW BOARD WITH ALL ITS ISSUANCES 
RELATED TO THE GRANT AND ADMINISTRATION OF INCENTIVES.
"(B) To approve or disapprove, the grant of tax incentives to the extent 
of the registered project or activity upon the recommendation of the 
Investment Promotion Agency: Provided, That the application for tax 
incentives shall be duly accompanied by a cost-benefit analysis: Provided,
30


S / A.
1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
further, That the IPAs SHALL USE THE FISCAL INCENTIVES REVIEW 
BOARD-PRESCRIBED[stiaH—prescribe—the] data requirements AND 
METHODOLOGIES for the application of incentives FOR PURPOSES OF [to 
allow for] the calculation of costs and benefits upon application: Provided, 
further. That the IPAs SHALL grant THE [of] tax incentives OF [to] 
registered projects or activities with investment capital of FIFTEEN [Gfie] 
billion pesos (PhplS,000,000,000.00) and below TO THE EXTENT OF THE 
REGISTERED PROJECT OR ACTIVITY [shall be delegated by the Fiscal 
Incentives Review Board to the eoncerned Investment Promotion Agency to
the extent of the rcgistefcd-projcct or activity]: Provided, furthermore. That 
the Fiscal Incentives Review Board, UPON THE RECOMMENDATION OF 
THEIPAs, may increase the threshold amount of FIFTEEN [One] billion pesos 
(Phpl5,000,000,000.00);
"(C) To approve applications for tax subsidies to government-owned 
or -controlled corporations, government instrumentalities, government 
commissaries, and state universities and colleges^;
"For this purpose, the other government agencies shall ensure 
complete submission of applications, documents, records, books, or other 
relevant data or material;
"(D) To formulate ADDITIONAL TIME-BOUND OR place-specific 
PROJECTS OR ACTIVITIES FOR INCLUSION IN THE ^strategic 
investment plans] STRATEGIC INVESTMENT PRIORITY PLAN during 
periods of recovery from calamities and post-conflict situations and where the 
Fiscal Incentives Review Board determines that there is a need to attract many 
classes, firms, that would accelerate the growth of a region's flagship 
industries, in accordance with the Medium-Term Development Plan, The Fiscal 
Incentives Review Board may formulate and approve place-specific strategic 
investment plans and recommend incentives to the President, following the 
same procedure in Section 297;
"(E) xxx;
"(F) xxx;
"(G) xxx;
"(H) xxx;
"(I) xxx;
"(J) xxx;
"(K) xxx;
31


1 
"(L) To promulgate such rules and regulations as may be necessary to
2 
implement AND/OR CLARIFY the intent and provisions of this [Section]
3 
TITLE. FOR PURPOSES OF PUBLICATION, THE FISCAL INCENTIVES
4 
REVIEW BOARD MAY MAKE USE OF ANY ELECTRONIC MEANS OF
5 
PUBLICATION IN THE OFFICIAL GAZETTE OR ITS OFFICIAL
6 
WEBSITE;
7 
"(M) xxx;
8 
"(N) xxx; [and]
9 
"(0) To exercise all other powers necessary or incidental to attain the
10 
purposes of this Act and other laws vesting additional functions on the Fiscal
11 
Incentives Review Board.
12 
"xxx."
13
14 
SEC. 17. Section 300 of the National Internal Revenue Code of 1997, as amended,
15 
Is hereby further amended to read as follows:
16 
"SEC. 300. Strategic Investment Priority Pian. - The Board of
17 
Investments, in coordination with the Fiscal Incentives Review Board,
18 
Investment Promotion Agencies, other government agencies administering tax
19 
incentives, and the private sector, shall formulate the Strategic Investment
20 
Priority Plan to be submitted to the President for approval, which may contain
21 
recommendations for types of non-fiscal support needed to create high-skilled
22 
jobs to grow a local pool of enterprises, particularly micro, small and medium
23 
enterprises (MSMEs), that can supply to domestic and global value chains, to
24 
increase the sophistication of products and services that are produced and/or
25 
sourced domestically, to expand domestic supply and reduce dependence on
26 
imports, and to attract significant foreign capital or investment. The Strategic
27 
Investment Priority Plan shall be valid for a period of three (3) years, subject
28 
to review and amendment every three (3) years thereafter unless there would
29 
be a supervening event that would necessitate its review[7]: PROVIDED,
30 
THAT THE BOARD OF INVESTMENTS SHALL CAUSE THE
31 
PUBLICATION OF THE RULES AND REGULATIONS IMPLEMENTING
32 
THE STRATEGIC INVESTMENT PRIORITY PLAN, INCLUDING ANY
33 
AMENDMENTS THEREOF, IN A NEWSPAPER OF GENERAL
34 
CIRCULATION AND ON ITS OFFICIAL WEBSITE, TO BE EFFECTIVE.
35 
"The Strategic Investment Priority Plan shall contain the following:
32


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
"(A) Priority projects or activities that are included in the Philippine 
Development Plan or its equivalent, or other government programs, taking into 
account any of the following:
"(1) Substantial amount of investments;
"(2) Considerable generation of employment, especially towards 
less developed areas;
"(3) Considerable amount of net exports;
"(4) Use of modern, advance, or new technology;
"(5) Processes and innovations that will lead towards the 
attainment of the sustainable development goals, shall include, but 
not be limited to, adoption of adequate environmental protection 
systems and sustainability strategies;
"(6) Addressing missing links and other gaps in the supply or 
value chain or otherwise moving up the value chain or product ladder;
"(7) Promotion of market competitiveness;
"(8) Enhancement of the capabilities of Filipino enterprises and 
professionals to produce and offer increasingly sophisticated products 
and services;
"(9) Contribution to Philippine food security and increase incomes 
in the agriculture and fisheries sector; or
"(10) Services and activities that can promote regional and global 
operations in the country.
"(B) Scope and coverage of location and industry tiers in Section 296;
and
25
26
27
28
29
30
31
32
33
34
35
36
"(C) Terms and conditions on the grant of enhanced deductions under 
Section 294(C), AS DETERMINED BY THE DOF.
"All sectors or industries that may be included in the Strategic 
Investment Priority Plan shall undergo an evaluation process AND SHALL 
CONSIDER REDUNDANCY to determine the suitability and potential of the 
industry or the sector in promoting long-term growth and sustainable 
development, and the national interest. In no case shall a sector or industry 
be included in the Strategic Investment Priority Plan unless it is supported by 
a formal evaluation process or report. FOR THIS PURPOSE, THE FISCAL 
INCENTIVES REVIEW BOARD SHALL PROMULGATE THE GUIDELINES 
ON THE CONSIDERATION OF REDUNDANCY IN THE STRATEGIC 
INVESTMENT PRIORITY PLAN FORMULATION.
33


• 
■' .A y
1 
"ACTIVITIES, WHOSE BUSINESS VIABILITY ARE
2 
DETERMINED PRIMARILY BY THE PRESENCE AND SIZE OF THE
3 
MARKET, LOCATION OR BY THE NATURE AND SCOPE OF THEIR
4 
OPERATIONS, AND CAN ONLY CATER TO A SPECIFIC MARKET OR
5 
ONLY OPERATE IN A GIVEN LOCATION PRIMARILY TO TAKE
6 
ADVANTAGE OF ITS AVAILABLE RESOURCES, SHALL BE
7 
CONSIDERED REDUNDANT EXCEPT WHEN SUCH ACTIVITIES ALSO
8 
INVOLVE EXPORTATION OF GOODS AND SERVICES.
9 
"The projects or activities must comply with the specific qualification
10 
requirements or conditions for a particular sector or industry and other
11 
limitations as set and determined by the Board of Investments, and in
12 
coordination with the Fiscal Incentives Review Board.
13 
"In no case shall the Investment Promotion Agencies accept
14 
applications unless the project or activity is listed in the Strategic Investment
15 
Priority Plan. Projects or activities not listed in the Strategic Investment Priority
16 
Plan shall be automatically disapproved."
17
18 
SEC. 18. Section 301 of the National Internal Revenue Code of 1997, as amended,
19 
is hereby further amended to read as follows:
20 
"SEC. 301. Power of the President to Grant Incentives. -
21 
Notwithstanding the provisions of Sections 295, 296, AND 296-A the President
22 
may, in the interest of national economic development, [and] OR upon the
23 
recommendation of the Fiscal Incentives Review Board, modify the mix, period
24 
or manner of availment of incentives provided under this Code OR CRAFT
25 
THE APPROPRIATE [finondal] FISCAL AND NON-FISCAL SUPPORT
26 
PACKAGE for a highly desirable project or a specific industrial activity based
27 
on defined development strategies for creating high-value jobs, building new
28 
industries to diversify economic activities, and attracting significant foreign and
29 
domestic capital or investment, and the fiscal requirements of the activity or
30 
project, subject to maximum incentive levels recommended by the Fiscal
31 
Incentives Review Board: Provided, That the grant of income tax holiday shall
32 
not exceed [eight-(8)] TEN (10) years; and thereafter, a special corporate
33 
income tax rate of five percent (5%) OR ENHANCED DEDUCTIONS may be
34 
granted: Provided, further, That the total period of incentive availment shall
35 
not exceed forty (40) years.
34


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
"The Fiscal Incentives Review Board shall determine whether the 
benefits that the Government may derive from such investment are clear and 
convincing and far outweigh the cost of incentives that will be granted in 
determining whether a project or activity is highly desirable.
"The exercise by the President of his powers under this Section shall 
be based on a positive recommendation from the Fiscal Incentives Review 
Board upon its determination that the following conditions are satisfied:
"(1) The project has a comprehensive sustainable development 
plan with clear inclusive business approaches, and high level of 
sophistication and innovation; and
"(2) Minimum investment capital of Fifty billion pesos 
(Php50/000,000,000.00) or its equivalent in US dollars, or a minimum 
direct local employment generation of at least ten thousand (10,000) 
within three (3) years from the issuance of the certificate of 
entitlement.
"Provided, That the threshold shall be subject to a periodic review by 
the Fiscal Incentives Review Board every three (3) years, taking into 
consideration international standards or other economic indicators: Provided, 
further, That if the project fails to substantially meet the projected impact on 
the economy and agreed performance targets, the Fiscal Incentives Review 
Board shall recommend to the President the cancellation of the tax incentive 
or FISCAL AND NON-FISCAL [ffnaneiol] support package or the modified 
period or manner of availment of incentives, after due hearing and an 
adequate opportunity to substantially comply with the agreed performance 
targets and outputs.
"For this purpose, THE PRESIDENT MAY GRANT [financial] NON­
FISCAL support PACKAGE LIMITED TO THE [includes] utilization of 
government resources such as land use[,] AND water appropriation.[7-peweF 
provision,—and budgetary support provision under the annual—General
Appropriations Act. j
"This power of the President, in as far as it commands additional 
public sector expenditures in support of investors, is suspended during fiscal 
years when, an [unimaginable] UNMANAGEABLE fiscal deficit is declared by 
the President on the advice of the Development Budget Coordination 
Committee with a consequence that even core budgetary obligations, such as, 
but not limited to, mandatory revenue allotments for local government units
35


1 
and budget for the National Economic and Development Authority's core public
2 
investments program, cannot be fully financed.
3 
"Notwithstanding the provisions in the preceding paragraphs, tax and
4 
duty incentives granted through legislative franchises shall be excepted from
5 
the foregoing powers of the President to review, withdraw, suspend, or cancel
6 
tax incentives and subsidies."
7
8 
SEC. 19. Section 309 of the National Internal Revenue Code of 1997, as amended,
9 
is hereby further amended to read as follows:
10 
"SEC. 309. Prohibition on Registered Activities. - A qualified registered
11 
project or activity under an Investment Promotion Agency administering an
12 
economic zone or freeport shall be exclusively conducted or operated within
13 
the geographical boundaries of the zone or freeport being administered by the
14 
Investment Promotion Agency in which the project or activity is registered:
15 
Provided, That a registered business enterprise may conduct or operate more
16 
than one qualified registered project or activity within the same zone or
17 
freeport under the same Investment Promotion Agency: Provided, further,
18 
That any project or activity conducted or performed outside the geographical
19 
boundaries of the zone or freeport shall not be entitled to the incentives
20 
provided in this Act, unless [such project or-activity is conducted or operated
21 
under—another—Investment—Promotion—Agency:] THE REGISTERED
22 
BUSINESS ENTERPRISES ARE ENGAGED IN THE INFORMATION
23 
TECHNOLOGY - BUSINESS PROCESS OUTSOURCING SECTOR, OR
24 
OTHER SIMILAR SECTORS THAT MAY BE ALLOWED TO CONDUCT
25 
BUSINESS UNDER 
ALTERNATIVE WORK ARRANGEMENTS.
26 
PROVIDED, FINALL Y, THAT DOUBLE REGISTRATION FOR PURPOSES
27 
OF AVAILING OTHER INCENTIVES UNDER SPECIAL LAWS SHALL NOT
28 
BE ALLOWED."
29
30 
SEC. 20. Section 311 of the National Internal Revenue Code of 1997, as amended,
31 
is hereby further amended to read as follows:
32 
"SEC. 311. Investments Prior to the Effectivity of [this Act] REPUBLIC
33 
ACT NO. 11534. - Registered business enterprises with incentives granted
34 
prior to the effectivity of [tins-Act] REPUBLIC ACT NO. 11534 shall be
35 
subject to the following rules:
36 
"(A) xxx;
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1 
"(B) Registered business enterprises, whose projects or activities were
2 
granted an income tax holiday prior to the effectivity of this Act and that are
3 
entitled to the five percent (5%) tax on gross income earned incentive after
4 
the income tax holiday, shall be allowed to avail of the five percent (5%) tax
5 
on gross income earned incentive based on Subsection (C), INCLUDING ALL
6 
CORRESPONDING EXEMPTIONS FROM LOCAL TAXES, FEES AND
7 
CHARGES, AND NATIONAL TAXES UNTIL DECEMBER 31, 2033; and
8 
"(C) Registered business enterprises currently availing of the five
9 
percent (5%) tax on gross income earned granted prior to the effectivity of
10 
this Act shall be allowed to continue availing the said tax incentive at the rate
11 
of five percent (5%), INCLUDING ALL CORRESPONDING EXEMPTIONS
12 
FROM LOCAL TAXES, FEES AND CHARGES, AND NATIONAL TAXES [for
13 
ten (10) years] UNTIL DECEMBER 31, 2033.
14 
"PROVIDED, THAT AFTER THE END OF THE TRANSITORY
15 
PERIOD HEREIN GRANTED, ALL REGISTERED EXPORT
16 
ENTERPRISES, WHO CONTINUE TO MEET THE TERMS OF THEIR
17 
REGISTRATION WITH THEIR CONCERNED IPA AND MAINTAIN AT
18 
LEAST SEVENTY PERCENT (70%) OF TOTAL ANNUAL PRODUCTION
19 
OR OUTPUT AS EXPORT SALES MAY CONTINUE AVAILING OF DUTY
20 
EXEMPTION ON IMPORTATION UNDER SECTIONS 294(D) AND
21 
295(D), VAT EXEMPTION ON IMPORTATION AND VAT ZERO-RATING
22 
ON LOCAL PURCHASES UNDER SECTIONS 294(E) AND 295(E) FOR
23 
THE ENTIRE REGISTRATION PERIOD."
24
25 
SEC. 21. Transitory Provisions. - The exemption from local and national taxes
26 
under Section 294(B) of this Act shall have retroactive application: Provided, That no tax
27 
refund or credit shall be granted to registered business enterprises covered by Section
28 
311 of the National Internal Revenue Code of 1997, as amended, as a result of the
29 
exemption from local and national taxes.: Provided, further. That registered business
30 
enterprises granted incentives under Republic Act No. 11534 or the CREATE Act shall
31 
continue with their existing incentives, subject to the applicable enhanced deductions
32 
under Sections 294(C)(6), (7), (8) and (9): Provided, furthermore. That the ten (lO)-year
33 
enhanced deductions granted under Section 296(B) of this Act shall automatically apply
34 
to domestic market enterprises registered under Republic Act No. 11534 or the CREATE
35 
Act.
36
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SEC. 22. Implementing Rules and Regulations. - Within ninety (90) days from the 
effectivity of this Act, the Secretary of Finance, upon the recommendation of the 
Commissioner of Internal Revenue, shall promulgate the necessary rules and regulations 
for its effective implementation: Provided, That for the provisions under Title XIII of the 
National Internal Revenue Code of 1997, as amended, the Secretary of Finance and the 
Secretary of Trade and Industry shall jointly promulgate the necessary rules and 
regulations thereof within the same period, after due consultations with the Commissioner 
of Internal Revenue, the Board of Investments, and other IPAs, for their effective 
implementation. Failure to promulgate the rules and regulations shall not prevent the 
implementation of this Act upon its effectivity.
SEC. 23. Separability Clause. - If any provision of this Act is declared 
unconstitutional, the remaining parts or provisions hereof not affected thereby shall 
remain in full force and effect.
SEC. 24. Repealing Clause. - All laws, presidential decrees, executive orders, letters 
of instructions, proclamations, administrative regulations, implementing rules and 
regulations, or any part thereof inconsistent with the provisions of this Act are hereby 
repealed, amended, or modified accordingly.
SEC. 25. Effectivity. - This Act shall take effect after fifteen (15) days following its 
complete publication in the Official Gazette or in a newspaper of general circulation.
Approved,
38