Amended Guidelines on the Tax Exemption Indorsement Requirement under FIRB AO No. 001-2023

The Fiscal Incentives Review Board (“FIRB”) issued Administrative Order (“AO”) No. 003-2023 dated 16 March 2023 for the amended guidelines on the Tax Exemption Indorsement (“TEI”) requirement under FIRB AO No. 001-2023 (“Amended Guidelines”). 

According to the FIRB, it is necessary to amend FIRB AO No. 001-2023 to support more efficient operations of the covered Registered Business Enterprises (“RBEs”) in the Information Technology-Business Process Management (“IT-BPM”) sector registered with the Board of Investments (“BOI”) for purposes of adopting up to 100% work-from-home arrangements without adversely affecting the enjoyment of their fiscal and non-fiscal incentives.  

The Amended Guidelines removed the TEI requirement for value-added tax (“VAT”) exempt and/or duty exempt importations that are or will be permanently stationed within, or that will be fully utilized or consumed within the economic zones and/or freeport zones. The TEI shall only be secured for VAT exempt and/or duty exempt importations that will be moved out of or are currently outside the economic zones and/or freeport zones.

The Amended Guidelines also provide that if there is an urgent need to move assets out of the economic zones during the pendency of the blanket TEI application, the covered RBEs may, after the lapse of the bond-free transition period for existing assets or starting 1 February 2023 for new assets, lodge with the Bureau of Customs (“BOC”) a Provisional Goods Declaration and secure a specific bond thereon, for purposes of moving the goods or assets out of the economic zones, subject to the provisions of Customs Administration Order No. 02-2021 and other related issuances of the BOC. 
In this regard, the Philippine Economic Zone Authority (“PEZA”) also issued Memorandum Circular No. 2023-018 on the compliance of PEZA transferee RBEs with the standard procedures for importation and movement of goods. Accordingly, an Import Permit lodged thru the PEZA electronic Import Permit System shall have an annotation that “TEI shall be secured in the event that the imported goods under this permit will be moved out of the economic zone.”