Tax Alerts

Guidelines on WFH arrangements for RBEs of the IT-BPM sector

(Fiscal Incentives Review Board Resolution No. 19-2021 dated August 2, 2021, Memorandum on Guidelines to monitor the compliance with the conditions prescribed under FIRB Reso 19-21 re WFH arrangement for RBEs in the IT-BPM Sector, dated September 9, 2021)

This Tax Alert is issued to inform all concerned on the guidelines issued by the Fiscal Incentives Review Board (FIRB) allowing Registered Business Enterprises (RBEs) of the Information Technology- Business Process Management (IT-BPM) sector to adopt Work-From-Home (WFH) arrangements because of the COVID-19 pandemic.

RBEs may continue implementing WFH arrangements without adversely affecting their fiscal incentives until March 31, 2022, subject to the following conditions:

  • The number of employees under WFH arrangement shall not exceed 90% of the total workforce of the RBE. Beginning January 1, 2022, the ceiling shall be reduced to 75% until March 31, 2022, However, if the state of calamity is extended beyond January 1, 2022, the ceiling shall be maintained at 90% until March 31, 2022.
  • The number of laptops or other equipment of the RBE outside ecozone should not exceed the number of its employees who are under WFH arrangement.
  • Bonds shall be posted for all equipment deployed by the RBE to their employees’ home. If such equipment is not returned to the site, the bond will be used to pay taxes and duties.
  • Revenues from export as required shall be maintained regardless of the allowed ratio of employees who will work from home.
  • The RBEs shall submit the following reportorial requirement to their respective Investment Promotion Agencies:
    • On or before September 30, 2021:
      • A list or equipment and other assets brought out of the economic or freeport zones with the following details:
        1. Quantity of laptops, desktops, or other assets;
        2. Acquisition cost and book value; and
        3. Amount of bond paid to cover 150% of the amount of taxes and duties (if imported) and VAT (if locally sourced)
      • The total number of employees and the number of employees under the WFH arrangement
      • A certification that the export requirement and number of employees will be maintained
    • Within 5 days from end of each month:
      • A report on the additional equipment and other assets brought out of the economic or freeport zones and the total number of employees and the number of employees under the WFH arrangement.

Non-compliance with the conditions prescribed may result in suspension, withdrawal or cancellation of tax incentives of the RBE.