Exemption of BOI-RBEs from Local Business Tax

As some information technology-business process management (IT-BPM) entities registered with the Philippine Economic Zone Authority are shifting to the Board of Investments (BOI) to retain the work-from-home arrangement beyond Dec. 31, 2022, the BOI issued Memorandum Circular 2022-005, reiterating the exemption from business tax of enterprises certified by the BOI as pioneer or non-pioneer enterprises, for a period of six years or four years, respectively, from the date of registration.

To avail themselves of the incentive, the registered business enterprise (RBE) must submit an application to the BOI Legal and Compliance Service along with the required fee, if applicable. The application shall be accompanied by the following:

a. Justifications based on Article 17 of Executive Order 226, as amended;

b. Applicable endorsement from the Department of Science and Technology, Department of Agriculture, Department of Energy, or other appropriate government agencies; and

c. Other information or documents may be required by the BOI.

The application or request shall be examined by the relevant BOI Service of the Industry Development Services to determine if the project or activity is a pioneer or non-pioneer, subject to the BOI’s Board of Directors for approval, upon satisfaction of the aforementioned requirements.

RBEs whose registered project or activity is upgraded to pioneer status must submit the original copy of their BOI certificate of registration, along with their specific terms and conditions, to the BOI Legal and Compliance Service for annotation of their pioneer status and payment of the applicable amendment fee.

Please be guided accordingly.