Tax Alert No. 16 [Fiscal Incentives Review Board (FIRB) Resolution No. 005‑26 dated 08 April 2026]

Granting Authority to Investment Promotion Agencies (IPAs) to Adopt up to 90% Temporary Work‑From‑Home (WFH) Arrangements for Registered Business Enterprises (RBEs) with Registered Projects or Activities in Light of the Declared National Energy Emergency Under Executive Order No. 110, s. 2026.

The FIRB issued Resolution No. 005-26 allowing RBEs registered with IPAs administering ecozones or freeports to implement WFH arrangements of up to ninety percent (90%) of their total workforce without adversely affecting their fiscal and non-fiscal incentives. This measure is issued under Rule 24 of the CREATE Act IRR in response to the declaration of a national energy emergency under Executive Order No. 110, s. 2026.

Set out below are the key provisions of the FIRB Resolution:

1. Expanded WFH Threshold

• RBEs may implement WFH arrangements of up to 90% of their total workforce engaged in the registered project or activity.
• The concerned IPA may impose a lower WFH cap, provided that it is not less than 50%, depending on operational requirements and specific circumstances of the RBE.

2. Penalty for Exceeding IPA-Imposed Threshold

• If an RBE exceeds the WFH limit prescribed by its IPA, it shall be subject to a penalty equivalent to regular income tax, multiplied by the excess over the allowed threshold.
• The excess shall be computed based on the average monthly excess during the period of non-compliance.

3. Notification and Reportorial Requirements

RBEs implementing WFH arrangements must notify their concerned IPA and, where applicable, submit:

• A verified inventory of laptops, desktops, and other equipment brought outside the zone, indicating whether these are locally procured or imported;
• A copy of the surety bond (if required); and
• A monthly report (within five days after month-end) of any additional equipment or assets brought out of the ecozone or freeport.

RBEs must continue to comply with all reportorial requirements and site inspections, and IPAs are required to closely monitor compliance with performance commitments.

4. Movement of Tax-and Duty-Free Assets

• The temporary movement of tax-and duty-free imported equipment outside the ecozone or freeport is allowed subject to prior IPA approval and compliance with customs regulations.
• A surety bond equivalent to 150% of the applicable taxes and duties, based on the net book value of the assets, must be posted with the Bureau of Customs (BOC).
• Only surety companies granted Authority to Transact Business as Surety Company (ATBAS) by the BOC may issue such bonds.

5. Local Purchases

• Locally purchased equipment may be moved out of the zone upon presentation of a BIR-issued VAT certificate identifying the assets.

6. Duration of the Temporary Measure

• The WFH arrangement is effective from the declaration of the national energy emergency and shall remain in force until the emergency is lifted, unless earlier terminated by the RBE.
• RBEs opting to terminate WFH arrangements early must notify their IPA at least seven (7) calendar days in advance and ensure that all bonded assets are returned to the facility.

You may access the full text of FIRB No. 005‑26 through the FIRB website.

For any inquiry or request for assistance, please feel free to contact anyone from our Tax Services group. You may also reach us through this link