THE FIRM ATTORNEY PROFILES PRACTICE AREAS CLIENT EXTRANET LOGIN
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Primary Contact

316 Mile Long Building

Amorsolo Street

Legaspi Village

Makati City

1200 Philippines

Telephone: (632) 8941441

TeleFax: (632) 8124296

e-mail: gtalaw@gtalawphil.com

 

Office Hours

9:30AM to 5:30PM PH Time

Monday - Friday

 

www.gtalawphil.com

 
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Incentives to Regional or Area Headquarters, Regional Operating Headquarters, Regional  Warehouses and Export Oriented Enterprise

 

Regional or Area Headquarters act as supervisory, communications and coordinating centers for their subsidiaries, affiliates, and branches in the region.

Regional Operating Headquarters are performing the following functions:

• General administration and planning
 

• Business planning and coordination
 

• Sourcing/procurement of raw materials and components
 

• Corporate finance advisory services
 

• Marketing control and sales promotion
 

• Training and personnel management
 

• Logistics services
 

• Research and development services, and product

  development
 

• Technical support and maintenance
 

• Data processing and communication
 

• Business development

Regional Warehouses is  engaged in the following activities:
 

• Serving as a supply depot for the storage, deposit, safekeeping of spare parts, components, semi-finished products, and raw materials including the packing, covering, putting up, marking, labeling, and cutting or altering to customer's specification, mounting and/or packaging into kits or marketable lots
 

• Filling up transactions and sales made by their head offices or parent companies
 

• Serving as a storage or warehouse of goods purchased locally by the home office for export abroad
 

Incentives to Regional or Area Headquarters

 

- Exemption from income tax;

 

- Exemption from branch profits remittance tax (BPRT);

 

- Exemption from value-added tax (VAT)
  sale or lease of goods and property, and
  services to the RHQ is subject to 0% VAT;

 

- Exemption from all kinds of local taxes, fees or charges

  imposed by a local government unit, except real property

  tax on land improvements and equipment;

 

- Tax- and duty-free importation of equipment and materials

  for training and conferences needed and solely used for the

  RHQ/ROHQ functions, and  which are not locally available,

  subject to prior BOI approval;

 

Incentives to Regional Operating Headquarters

 

- Subject to preferential income tax rate of 10% on taxable

   income;
 

- Subject to applicable BPRT (generally 15%);
 

- Subject to VAT;
 

- Exemption from all kinds of local taxes, fees or charges

  imposed by a local government unit, except real property

  tax on land improvements and equipment;


- Tax- and duty-free importation of equipment and materials

   for training and conferences needed and solely used for the

   RHQ/ROHQ functions, and  which are not locally available,

   subject to prior BOI approval.


Incentives to Regional Warehouses

 

Regional Warehouses has the option to locate its operation at the economic zones. As such, it shall be granted similar incentives available to PEZA-registered companies.

 

EXPORT ORIENTED ENTERPRISE (Export Development Act of 1994 RA 7844)

 

This law provides incentives to exporters to encourage investments in the export sector. Exporters are generally defined as earning at least 50% of their normal operating revenue from the sale of products or services abroad.

Features of the Export Development Act (EDA)

The following are the key features of EDA:
 

• Institutionalization of the Export Development Council (EDC) to direct the export offensive;
 

• Privatization of export promotion functions that can be undertaken by the private sector, including the establishment of world-class Philippine Trade Centers;
 

• Setup of a privately led Export Financing Institution whose services shall be devoted to supporting the financing needs of the export sector;
 

• Granting to exporters of much needed fiscal incentives, most of them patterned after, but not as extensive as those in newly  industrializing economies;

Incentives Available to Exporters Registered under EDA

EDA incentives are granted in addition to existing incentives from other government agencies such as the BOI and PEZA are as follows:

• Exemption from Presidential Decree No. 1853, or Advanced Payment of Customs Duties;
 

• Tax credit for increase in current year's export revenues, computed as follows:
 

  Increase in Annual Export Revenue Tax Credit (in %)
 

                     First 5%                          2.5
                     Next 5%                          5.0
                     Next 5%                          7.5
                     In excess of 15%           10.0
 

Tax Treatment of Foreign and Filipino Employees of RHQs and ROHQs
 

Expatriate employees of RHQs and ROHQs will enjoy the following incentives:
 

• Multiple entry visa;
 

• 15% preferential tax on gross compensation income
 

• Tax- and duty-free importation of personal and household

   effects;
 

• Travel tax exemption.
 

The 15% preferential tax is also available to Filipinos employed in an RHQ/ROHQ who occupy the same positions as the non-Filipino employees. However, Filipino employees have the option to be taxed at either 15% or the normal rates of 0% to 32% depending on their net taxable income.

 

 

Contact Us

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You're invited to call us to discuss your company's legal matters. We shall be glad to talk with you over the telephone, or in our office or yours, whichever is easiest for you. You can also e-mail us at gtalaw@gtalawphil.com and we shall get back to you immediately.

 

 

GUZMAN TAÑEDO & ACAIN

Mile Long Building 316

Legaspi Village

Amorsolo Street

Makati City

Telephone: 8941441

TeleFax: 8124296

e-mail: gtalaw@gtalawphil.com 

 

 

 

 

 

 

 

 

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Guzman Tañedo & Acain Law Offices
316 Mile Long Building, Amorsolo Street, Makati City, Philippines - Telephone: 894.14.41; Telefax: 812.42.96

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