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Philippines: Tax incentive compliance report
Philippines: Tax incentive compliance report
Monday, August 14, 2016 – The Philippines is one of the largest outsourcing destinations in the world. One of the reasons for the sector’s rapid growth is government support in the form of regulations and incentives. Most BPO companies in the country are registered with the special economic zones that offer benefits relating to capital, operation, and taxation.
Companies registered with the Philippine Economic Zone Authority (PEZA) will enjoy income tax holiday, normally four years for non-pioneer projects and six years for pioneer projects but extendable up to eight years. At the end of the tax holiday, the company is liable to pay a tax, which is computed as 5% of the gross income. In addition, PEZA-registered enterprises are exempted from all duties and tax on equipment and parts imported as well as wharfage on such imports. They also need not pay value-added tax (VAT) in the case of local purchases of goods and services, and expanded withholding tax. Read More?