Fiscal Interview Review Board (FIRB) refers to policy making and oversight function.

Shall exercise policy making and oversight functions on the administration and grant of tax incentives by the IPAs and Other Government Agencies (OGAs) administering tax incentives.

Reference: CREATE IRR, Part V, Rule 13, Section 1

WHAT IS THE FIRB?

The Fiscal Incentives Review Board, or FIRB is the interagency government body given the authority by the Philippine law to grant tax incentives to registered business enterprises (RBE).

The FIRB has delegated to the country's investment promotion agencies (IPAs) the grant of tax incentives for registered projects or activities with investment capital of one billion pesos (P1,000,000,000) and below.

The FIRB also grants tax subsidies to government-owned and controlled corporations (GOCCs).

WHAT ARE THE TAX INCENTIVES AVAILABLE?

Business enterprises registered with the IPAs may apply for incentives under the single menu provided under CREATE, which include the following:

• 4 to 7 years of income tax holiday (ITH)
• 10 years of special corporate income tax (SCIT) for export enterprises
• Enhanced Deductions
• Customs duty exemption on importation
• Value-Added Tax (VAT) exemption on importation and VAT zero-rating on local purchases.

Investment Promotion Agencies (IPA) refers to government entities created by law, executive order, decree or other issuance, in-charge of promoting investment, granting and administering tax and non-tax incentives, and overseeing the operations of the different economic zone and free ports in accordance with the respective special laws.

E.g. PEZA, BOI, SBMA, etc.

Reference: CREATE IRR, Section 4 (P) 

Registered Business Enterprise (RBE) refers to any individual, partnership, corporation, Philippine branch of a foreign corporation, or other entity organized and existing under Philippine laws and registered with IPA excluding service enterprises such as those engaged in customs brokerage, trucking or forwarding services, janitorial services, security services, insurance, banking and other financial services, consumers' cooperative, credit unions, consultancy services, retail enterprises, restaurants, or such other similar services, as may be determined by the FIRB.

Reference: CREATE IRR, Section 4 (W)

• Should engaged in activity under the SIPP
• Should meet the target performance metrics after agreed time period
• Should install adequate accounting systems that can identify the investments, revenue, costs and profit for each activity or establish a separate corporation for each registered project activity
• Should comply with e-receipting and e-sales requirement
• Should submit annual reports of beneficial ownership of the organization and related parties

Reference: Title VIII - Tax Incentives, Section 304

Philippine Economic Zone Authority (PEZA) promotes the establishment of economic zones in the Philippines for foreign investments.

PEZA is the government agency tasked to extend assistance, register, grant incentives to and facilitate the business operations of investors in export-oriented manufacturing and service facilities inside selected areas through the country proclaimed by the President of the Philippines as special economic zones.

ECOZONES or “Special Economic Zones” (SEZ) shall refer to selected areas with highly developed or which have the potential to be developed into agri-industrial, industrial, tourist, recreational, commercial, banking, investment and financial centers whose metes and bounds are fixed or delimited by Presidential Proclamations.

An ECOZONE may contain any or all of the following: industrial estates (IEs), export processing zones (EPZ), free trade zones and tourist / recreational centers.

Industrial Estate (IE) - refers to a tract of land subdivided and developed according to a comprehensive plan under a unified continuous management and with provisions for basic infrastructure and utilities, with or without pre-built standard factory buildings and community facilities for the use of a community of industries.

Export Processing Zone (EPZ) - refers to a specialized industrial estate located physically and / or administratively outside the customs territory and predominantly oriented to export production. Enterprises located in export processing zones are allowed to import capital equipment and raw materials free from duties, taxes and other import restrictions.

Free Trade Zone - refers to an isolated policed area adjacent to a port of entry (such as a seaport) and / or airport where imported goods may be unloaded for immediate transhipment or stored, repacked, sorted, mixed, or otherwise manipulated. However, movement of these imported goods from the free-trade area to a non-free trade area in the country shall be subject to customs and internal revenue rules and regulations.

Tourist / Recreational Center - refers to an area within the ECOZONE where tourist accommodation facilities such as hotels, apartels, tourist inns, pension houses, resorts, sports and / or recreational facilities are provided to render tourism services for both local and foreign tourists, travellers and investors in accordance with the guidelines issued by the PEZA.

Customs Territory shall mean the national territory of the Philippines outside of the proclaimed boundaries of the ECOZONES except those areas specifically declared by other laws and/or presidential proclamations to have the status of special economic zones and / or free ports.

ECOZONES ENTERPRISES

Type of Ecozone Enterprises

• Export Enterprise
• Domestic Market Enterprise
• Pioneer Enterprise
• Free Trade Enterprises
• Utilities Enterprises
• Facilities Enterprises
• Developer/Operator
• Service Enterprises
• Tourism Enterprises
• Ecozone IT Enterprises and Parks

Export Enterprise refers to an individual, association, partnership, corporation or other form of business organization which has been registered with the PEZA to engaged in manufacturing, assembling or processing activity falling within the purview the Act and resulting in the exportation of 100% of its production, unless a lower percentage of its production for exportation is prescribed by the Board subject to such terms and conditions as the latter may determine.

Domestic Market Enterprise refers to an individual, association, partnership, corporation or other form of business organization which has been registered with the PEZA to engaged in manufacturing, assembling or processing activity falling within the purview of the Act resulting in the sale of its finished products in the customs territory or in the non-restricted or authorized areas within the ECOZONE in its entirety or if exporting a portion of its production output, it continually fails to export at least fifty percent (50%) thereof for a period of three (3) years without any justifiable reason in case at least 60% of its working capital is owned by Philippine nationals or in case more than 40% of its working capital is owned by foreign nationals, it continually fails to export at least seventy percent (70%) of its production output for a period of three (3) years without any justifiable reason.

Pioneer Enterprise - shall mean an ECOZONE enterprise (1) engaged in the manufacture, processing or production and not merely in the assembly of packaging of goods, products, commodities or raw materials that have not been or are not being produced in the Philippines on a commercial scale or (2) which uses a design, formula, scheme, method, process or system or production of transformation of any element, substance or raw materials into another raw material or finished goods which is new and untried in the Philippines (3) which produces non-conventional fuels or manufactures equipment which utilizes non-conventional sources of energy or uses or converts to coal or other non-conventional fuels or sources of energy in its production, manufacturing or processing operations: or (4) engaged in the pursuit of agri-export processing zone development or (5) given such status under the Investment Priorities Plan: Provided, That the final product in any of the foregoing instances involves or will involve substantial use and processing of domestic raw materials, whenever available, taking into account the risk and magnitude of investment.

Free Trade Enterprise - refers to an individual, association, partnership, corporation or other form of business organization which has been registered with the PEZA to engaged in the importation of goods or merchandise within the restricted or free trade area in the ECOZONE tax and duty-free for immediate transshipment or for storage, repacking, sorting, mixing or manipulation and subsequent exportation unless the Board allows the sale thereof in the customs territory subject to the payment of customs duties and internal revenue taxes to such other terms and conditions as it may determine.

Utilities Enterprise - shall refers to a business entity or concern within the ECOZONE duly registered with and / or franchised / licensed by the PEZA with or without the incentives provided under Republic Act No. 6957, as amended, (the Build-Operate-Transfer Law) and / or with or without financial exposure on the part of the PEZA, such as contractors/operators of light and power systems, water supply and distribution systems, communications and transportation systems within the ECOZONE and other similar or ancillary activities as may be determined by the Board.

Facilities Enterprise - shall refers to a business entity or concern within the ECOZONE duly registered with and / or franchised / licensed by the PEZA with or without incentives provided under Republic Act No. 6957, as amended, (the Build-Operate-Transfer Law) and / or with or without financial exposure on t he part of the PEZA such as contractors / operators of buildings, structures, warehouses, site development and road network, ports, sewerage and drainage system and other facilities for the development, operation and maintenance of the ECOZONE and other similar or ancillary activities as may be determined by Board.

Developer/Operator Enterprise - refers to a business entity or concern duly registered with and / or licensed by the PEZA to develop, operate and maintain an ECOZONE or nay or all of the component IE, EPZ, Free Trade Zone or Tourist / Recreational Center and the required infrastructure facilities and utilities such as light and power system, water supply and distribution system, sewerage and drainage system, pollution control devices, communication facilities, paved road network, administration building and other facilities as may be required by the PEZA. The term shall include the PEZA and / or the Local Government Unit when by the themselves or in joint venture with a qualified private entity, shall act as the Developer / Operator of the ECOZONES. As such, they shall be entitled to the same incentives under Rule XIV of these Rules in accordance with the pertinent provisions of the Act and the Code.

Service Enterprise -  shall refers to a business entity or concern within the ECOZONE such as but not limited to those engaged in customs brokerage, trucking / forwarding services, parcel services, janitorial services, security services, insurance, and / or banking services, consultancy services, restaurants or such other services within the ECOZONE as may be determined by the Board, duly registered and/or licensed by the PEZA whose income derived within the ECOZONE shall be subject to taxes under the National Internal Revenue Code pursuant to Section 25 of the Act.

Tourism Enterprise - shall refer to an individual, association, partnership, corporation or other business organization duly registered with the PEZA proposing to engaged in the establishment and operation of tourist-oriented accommodations, restaurants operated as an integral part of a tourism facility (e.g., hotels, resorts, recreational centers), sports and recreational facilities within the ECOZONE.

References: PEZA IRR || Special Economic Zone Act (RA 7916) || Special Economic Zone Act IRR

Export Enterprise refers to any individual, partnership, corporation, Philippine branch of a foreign corporation, or other entity organized and existing under Philippine laws and registered with an IPA to engage in manufacturing, assembling or processing activity, and services such as information technology (IT) activities and business process outsourcing (BPO), and resulting in the direct exportation, and/or sale of its manufactured, assembled or processed product or IT/BPO services to another registered export enterprise that will form part of the final export product or export service of the latter, of at least seventy percent (70%) of its total production or output.

Reference: CREATE IRR, Section 4 (M)

Domestic Market Enterprise refers to any enterprise registered with an IPA other than an export enterprise.

Reference: CREATE IRR, Section 4 (L)

Strategic Investment Priority Plan (SIPP) refers to the plan prepared by the BOI, in coordination with the FIRB, IPAs, and OGAs administering tax incentives, and the private sector, which is approved by the President, and contains the priority projects or activities, scope and coverage of location and industry tiers, recommendations for non-fiscal support and corresponding specific activities wherein investments are to be encouraged, and other information, analyses, data, guidelines, or criteria as the BOI may deem appropriate.

Reference: CREATE IRR, Section 4 (DD)

SIPP

• BOI, FIRB, IPA, Other Government Agencies, Private Sectors shall formulate the SIPP to be endorsed to the President
• Includes recommendation for types of non-fiscal support needed to create a high-skill jobs to grow a local pool of enterprise

Micro, Small, Medium Enterprise (MSME)

• Increase sophistication of product and services
• Expand domestic supply and reduce dependence to importation
• Attract significant foreign capital investment

SIPP is valid for 3 years and subject to review every 3 years.
A. Priority Projects (Phil Development Plan)
B. Scope and Coverage of location and industry
C. Terms and conditions on the enhanced grant of deductions

Reference: Title VIII - Tax Incentives, Section 300