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The deadline for registered business enterprises in the IT-BPM sector to transfer to the Board of Investments has been extended to January 31 by the Fiscal Incentives Review Board
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The deadline was extended as only about 40% of the affected IT-BPM operations registered with other investment promotions agencies submitted the requirements on time
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Around 640 RBEs have yet to submit their requirements for the transfer
The deadline for transfer of registered business enterprises in the information technology and business process management (IT-BPM) sector to the Board of Investments (BOI) was extended to January 31, 2023 by the Fiscal Incentives Review Board (FIRB).
The original deadline was December 31, 2022 but the FIRB in Resolution No. 033-22 said only about 40% of the affected IT-BPM businesses registered with other investment promotion agencies such as the Philippine Economic Zone Authority (PEZA) have been able to submit the requirements on time.
Around 640 RBEs have yet to submit their requirements for the transfer, FIRB said in a statement.
Finance Secretary and FIRB chairperson Benjamin Diokno reaffirmed the FIRB’s continued support for IT-BPM enterprises by recognizing the need to adopt flexible work arrangements without adverse effects on the tax incentives they receive.
“We fully support our stakeholders in the IT-BPM sector and grant their request for more time to complete their transfer to the BOI,” Diokno said.
“The FIRB is committed to providing any form of assistance to effectively and expeditiously carry out the transfer of the concerned IT-BPM enterprises,” he added.
To resolve the issue on the work-from-home arrangement of IT-BPM companies, FIRB agreed on September 14, 2022 the transfer of their registration from PEZA to BOI until December 31, 2022.
READ: IT-BPM staff may work from home beyond December
This would allow IT-BPM firms to implement WFH arrangements and continue availing themselves of fiscal incentives without violating Section 309 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 11534, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
Under R.A. 11534, RBEs and/or registered activities must be conducted within the geographical boundaries of the ecozone or freeport where they are located to be entitled to fiscal incentives. The BOI is the only investment promotion agency that is not affected by boundary constraints or zone limits.
PEZA and the IT & Business Process Association of the Philippines had earlier requested FIRB to allow the implementation of a hybrid work scheme due to concerns of investors and workers amidst the ongoing pandemic until December 2022.
On a separate development, FIRB said it is finalizing the guidelines on the suspension or withdrawal of tax incentives, and the cancellation of project or activity registration applicable to all RBEs.
The guidelines are meant to provide uniform rules for imposing penalties on non-compliant RBEs. FIRB’s power to suspend or withdraw tax incentives or to cancel business registration was granted under the CREATE Act.
A public consultation by the end of January will be held once guidelines have been approved by the FIRB Technical Committee.
The guidelines will clarify procedures for RBEs when they respond to a show cause order issued by their respective IPAs or FIRB, or when filing an appeal from an adverse finding.
Apart from finalizing the guidelines, the Board has approved applications for tax incentives from new domestic enterprises operating tourist accommodation facilities and the construction of a common passive telecommunications tower infrastructure during the FIRB meeting held on January 6, 2023.
The approved investment applications will accelerate the present administration’s ongoing economic recovery efforts, specifically in areas of tourism and digitalization.
