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(FIRB Resolution No. 026-2022, dated 14 September 2022)
(PEZA Memo Circular No. 2022-066, dated 06 October 2022)
This Tax Alert is issued to inform all concerned taxpayers on the extension of 30:70 work-from-home (WFH) arrangement and the guidelines on the transfer of registration to Board of Investments (BOI) from Philippine Economic Zone Authority (PEZA) and other Investment Promotion Agency (IPA) administering an economic zone or freeport zone by Registered Business Enterprises (RBEs) under the Information Technology-Business Process Management (IT-BPM) sector.
RBEs under IT-BPM sector may adopt WFH arrangements not exceeding 30% of their total workforce without adversely affecting their income tax incentives under CREATE Act until December 31, 2022, provided that all conditions under FIRB Resolution Nos. 19-2021, 17-2022, and other relevant issuances are complied with.
In addition, RBEs in the IT-BPM sector may be allowed to transfer their registration from an Investment Promotion Agency (IPA) administering an ecozone or freeport zone (e.g. PEZA) to the BOI and adopt up to 100% WFH arrangement. RBEs in the IT-BPM sector have until December 31, 2022 to transfer their registration.
However, the monitoring of its compliance and availment of their remaining incentives shall be under its original IPA.
The following guidelines should be followed to proceed with the transfer of registration:
1. RBEs in IT-BPM sector shall signify to the concerned IPA of their intention to transfer to BOI;
2. The concerned IPA shall prepare an endorsement to BOI, which shall contain the following basic information:
a) Registration Details (Certificate of Registration, Date of Registration, and Registered Activity with corresponding PSIC Code)
b) Remaining Tax Incentives; and
c) Status of compliance with registration terms and conditions;
3. BOI shall issue the BOI Certificate of Registration (CR) indicating the remaining tax incentives of the project. The current Cost Benefit Analysis for new projects shall no longer be applied to the transferee RBEs;
4. The concerned IPA shall monitor compliance of transferee RBEs and submit a report to the BOI in relation to the BOI CRs issued.
The transfer of registration is applicable to RBEs under IT-BPM sector with remaining tax incentives under Section 311 of the NIRC of 1997, as amended, or those with approved incentives on or before September 14, 2022 under the CREATE Act, with the concerned IPA.
After the lapse of the period of the remaining tax incentives, existing registered project of the transferee RBEs shall not be entitled to additional incentives. However, they may be eligible to apply for another tax incentive if the activity is listed in the Strategic Priority Plan and if there is a new investment or qualified expansion.
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