Income Tax Holiday in the Philippines
The most important things to consider when doing the business registration in the Philippines is to determine if the business will qualify for income tax holiday. During the income tax holiday, the corporation or any entity granted with such tax holiday have no obligation to pay any income tax to Philippine government. When doing the registration of your business with Philippine Securities and Exchange Commission (SEC) and if qualify, foreign entity or corporation can undergo the business registration either with Philippine Eonomic Zone Authority (BOI) or Board of Investment (BOI) to avail the income tax holiday.
Provided below are the detailed list of information in availing the Income Tax Holiday with Board of Investment (BOI) or Philippine Eonomic Zone Authority (PEZA)
Board of Investment (BOI)
• Income Tax Holiday is available for 4 years for non-pioneer enterprises or 6 years for pioneer enterprises from the start of business commercial operations
• It should be within the limited to the registered activity
•Starting period for Income Tax Holiday is start of commercial operation. However, in the case of expansion, income tax holiday is
available for the next three (3) years.
•Exempt from income tax only and subject to other national or local taxes. The company is subject to regular 30% income tax after the income tax holiday period.
Philippine Eonomic Zone Authority (PEZA)
• Income tax holidayor four (4) years for non- pioneer IT enterprises or six (6) years for pioneer IT enterprises.
•Limited to the registered activity
•Reckoning period for ITH incentive is the start of commercial operations.
•After the ITH period, subject to special 5% tax on gross income earned, in lieu of all national and local taxes, except real property taxes on land owned by developers