PEZA Economic Incentives – Part 2 of PEZA Series: Perks of Being a PEZA-Registered Business

All PEZA-registered Economic Enterprises are granted the following Non-Fiscal Incentives:

  1. Simplified Import-Export Procedures via Electronic Import Permit System and Automated Export Documentation System;
  2. Non-resident foreign nationals may be employed in supervisory, technical, or advisory positions;
  3. Special Non-Immigrant Visa with Multiple Entry Privileges for the following non-resident foreign nationals in a PEZA-registered Economic Zone Enterprise:
    • Investor/s
    • Officers and Employees in supervisory, technical, or advisory position
    • And their spouses and unmarried children under 21 years of age
PEZA Incentives (1).jpg

The following are the Tax and other Fiscal Incentives provided to PEZA-registered businesses:

  1. Economic Zone Export Manufacturing Enterprise
    • Income Tax Holiday (ITH) – 100% exemption from Corporate Income Tax up to a period of:
      • 4 years for Non-pioneer Project
      • 6 years for Pioneer Project
        (ITH Extensions may be granted, subject to compliance with certain criteria, and not in excess of 8 years)
      • 3 years for Expansion Project
    • 5% Special Tax on Gross Income, and exemption from all national and local taxes, upon expiration of the ITH period;
    • Tax and duty-free importation of raw materials, capital equipment, machineries and spare parts;
    • Exemption from wharfage dues and export tax, impost or fees;
    • VAT zero-rating of local purchases, subject to compliance with BIR and PEZA requirements;
    • Exemption from all local government imposts, fees, licenses or taxes, except real estate tax while still under ITH; 
    • Machineries installed and operated within the zone for manufacturing, processing or for industrial purposes are exempt from real estate taxes for the first (3) years of operation of such machineries. Production equipment not attached to real estate are exempt from real property taxes;
    • Exemption from expanded withholding tax.
  2. Information Technology Enterprise
    • Income Tax Holiday (ITH) – 100% exemption from Corporate Income Tax up to a period of:
      • 4 years for Non-pioneer Project
      • 6 years for Pioneer Project
        (ITH Extensions may be granted, subject to compliance with certain criteria, and not in excess of 8 years)
      • 3 years for Expansion Project
    • 5% Special Tax on Gross Income, and exemption from all national and local taxes, upon expiration of the ITH period;
    • Tax and duty-free importation of equipment and parts;
    • Exemption from wharfage dues and export tax, impost or fees;
    • VAT zero-rating of local purchases, including land-based telecommunications, electrical power, water bills, and lease on the building, subject to compliance with BIR and PEZA requirements;
    • Exemption from all local government imposts, fees, licenses or taxes, except real estate tax while still under ITH; 
    • Machineries installed and operated within the zone for manufacturing, processing or for industrial purposes are exempt from real estate taxes for the first (3) years of operation of such machineries. Production equipment not attached to real estate are exempt from real property taxes;
    • Exemption from expanded withholding tax.
  3. Tourism Economic Zone Locator Enterprise
    • 4 years of Income Tax Holiday (ITH);
    • 5% Special Tax on Gross Income, and exemption from all national and local taxes, upon expiration of the ITH period;
    • Tax and duty-free importation of capital equipment;
    • VAT zero-rating on local purchases of goods and services, including land-based telecommunications, electric power, and water bills;
    • E xemption from expanded withholding tax.
  4. Medical tourism Enterprise
    • 4 years of Income Tax Holiday (ITH);
    • 5% Special Tax on Gross Income, and exemption from all national and local taxes, upon expiration of the ITH period;
    • Tax and duty-free importation of medical equipment, including spare parts and equipment supplies, required for the technical viability and operation of the registered activities of the enterprise;
    • VAT zero-rating on local purchases of goods and services, including land-based telecommunications, electric power, and water bills;
    • Exemption from expanded withholding tax.
  5.  Agro-Industrial Economic Zone Enterprise
    • 4 years of Income Tax Holiday (ITH);
    • 5% Special Tax on Gross Income, and exemption from all national and local taxes, upon expiration of the ITH period;
    • Tax and duty-free importation of production equipment and machineries, breeding stocks, farm implements including spare parts and supplies of the equipment and machineries;
    • Exempti on from export taxes, wharfage dues, impost and fees;
    • VAT zero-rating on local purchases of goods and services, including land-based telecommunications, electric power, and water bills;
    • Exemption from payment of local government fees such as Mayor’s Permit, Business Permit, Permit on the Exercise of Profession/Occupation/Calling, Health Certificate Fee, Sanitary Inspection Fee, and Garbage Fee.
  6. Economic Zone Logistics Enterprise
    • Exemption from duties and taxes on raw materials, semi-finished goods for re-sale to, or for packing/covering, cutting, altering for subsequent sale to PEZA-registered Export Manufacturing Enterprises, for direct export or for consignment to PEZA-registered export enterprise;
    • VAT zero-rating on raw materials for checking, packing, visual inspection, storage, and shipping to be sourced locally.
  7. Economic Zone Developer/Operator
    • 5% Special Tax on Gross Income and exemption from all national and local taxes, except real property tax on land owned by the Economic Zone Developer;
    • VAT zero-rating of local purchases; 
    • Exemption from expanded withholding tax.
  8. Facilities Enterprises
    • 5% Special Tax on Gross Income and exemption from all national and local taxes, except real property tax on land owned by developers;
    • VAT zero-rating of local purchases; 
    • Exemption from expanded withholding tax.
  9. Economic Zone Utilities Enterprise
    • 5% Special Tax on Gross Income and exemption from all national and local taxes, except real property tax on land owned by developers;
    • VAT zero-rating of local purchases; 
    • Exemption from expanded withholding tax.

Respicio & Co. Law Firm can help you evaluate your investment, locate your operation in an ideal zone, building or park, and fully maximise your PEZA incentives.

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