Location restriction for tourism economic zone enterprises

Investors planning to establish tourism economic zones (TEZs) or who wish to locate as TEZ enterprises in Metro Manila, Cebu City, Mactan Island, and Boracay Island shall no longer enjoy the following tax incentives enjoyed by economic zone developers and locator enterprises:

1. 5% gross income tax incentive granted to economic zone developers of TEZs

2. Income tax holiday (ITH) and 5% gross income tax to locator enterprises of TEZs, except for tax and duty-free importation and zero-VAT rating on their local purchase of capital equipment

Existing TEZ developers/operators as well as TEZ locator enterprises in Metro Manila, Cebu City, Mactan Island and Boracay Island shall continue to enjoy the tax incentives granted to them by the Philippine Economic Zone Authority (PEZA). However, TEZ developers/operators and locator enterprises in the aforesaid areas that have not signed their registration agreements with PEZA shall be covered by the new PEZA policy.

Henceforth, no more new TEZs shall be allowed to be established in the said areas.

(PEZA Board Resolution No. 12-610, November 13, 2012)

Tax Brief – January 2013

Punongbayan and Araullo