Tax Alert No. 56 [Revenue Memorandum Circular (RMC) No. 142-2022 dated 2 November 2022]

Publishing the Full Text of Department of Trade and Industry (DTI) Memorandum Circular No. 22-19, s. 2022 Prescribing the Guidelines on the Registration with the Board of Investments (BOI) of Existing Registered Business Enterprises (RBEs) in the Information Technology Business Process Management (IT-BPM) Sector

RMC No. 142-2022 has been issued to circulate the DTI Memorandum Circular (MC) No. 22-19 which prescribes guidelines on the registration of existing RBEs in the IT-BPM sector with the BOI, without adversely affecting their tax incentives.

The said DTI MC was issued in light of FIRB Resolution No. 026-22 dated 14 September 2022, which allows the shift of registration of RBEs in the IT-BPM sector to the BOI until 31 December 2022 and the adoption of up to 100% work from home (WFH) arrangement. 

The salient provisions of DTI MC No. 22-19 are as follows:

• The Circular shall cover all RBEs with remaining tax incentives pursuant to Section 311 of the Tax Code, as amended, and those with approved incentives on or before 14 September 2022 under the CREATE Act with the concerned Investment Promotion Agency (IPA). RBEs with approved incentives shall be given until 31 December 2022 to register with the BOI.
• In registering with the BOI, the RBE shall file its request with the IPA using the prescribed form. 
  
• The BOI Infrastructure and Services Industries Service, after evaluating the registration requirements and payment of the applicable fee, shall issue the BOI Certificate of Registration (BOI COR) to the RBEs, which shall specify the remaining incentives and period of entitlement. 
  
• The remaining incentives of the affected RBEs shall continue to be administered by the concerned IPA within the corresponding period of entitlement as established in the issued BOI COR. 
  
• After the lapse of the period of the remaining tax incentives, the existing registered project of the RBE shall not be entitled to additional incentives, unless there is a new investment or qualified expansion project under the Strategic Investment Priority Plan (SIPP).
  
• The concerned IPA shall continue to monitor the RBE’s compliance with the terms and conditions of their registration. 
  
• No bond in whatever form shall be imposed on the movement of capital equipment.
  
• Within thirty (30) days from the issuance of the BOI COR, the RBE is required to submit information on the WFH employees and equipment and/or other assets brought out of the Ecozone or Freeport Zone, to the concerned IPA. The RBE shall submit a monthly report within five (5) days after the end of each month.
  
• In the event of cancellation of its BOI COR, the RBE shall file its request to the concerned IPA. Once the cancellation is approved, the BOI COR shall be surrendered to the BOI Legal and Compliance Service along with the letter of cancellation or endorsement issued by the concerned IPA.
  
• The MC shall take effect immediately following its publication in a newspaper of general circulation (i.e.19 October 2022). All existing rules and regulations or parts thereof that are inconsistent with the provisions of the MC are hereby amended accordingly.
  

You may access the full version of the Circular and DTI MC through the BIR website.