EFFECT OF TRABAHO BILL (House Bill 313)

All existing investment promotion agencies (IPAS) will be under TITLE XIII – General provisions on Tax
incentives.

IPAS includes entities registered with BOI and PEZA.

STRATEGIC INVESTMENT PRIORITY PLAN (SIPP)

– the period of availment of incentives shall be reckoned from the start of commercial operation.

- Incentives are only given up to the extent of their approved registered projects or activities
- Unless otherwise provided, direct exports are subject to VAT Zero rating and domestic sales
are subject to the regular VAT rate.

Export Sales – sale of an export enterprise paid for in freely convertible foreign currency inwardly
remitted to the Philippines.

Income Tax Holiday

The Income Tax Holiday shall be granted for a period not exceeding three (3) years: provided, that after
expiration, the incentives may be applied for a period not exceeding five (5) years, which includes the
period of ITH availment;

Reduced Corporate Income Tax for entities under SIPP

18%

17% beginning Jan. 1, 2021

16% beginning Jan. 1, 2023

15% beginning Jan. 1, 2025

14% beginning Jan. 1, 2027

13% beginning Jan. 1, 2029

Value Added Tax:

Registered Enterprises whose export sales meet the Ninety Percent threshold and are located within the
ecozone:
VAT exemption on importation and VAT Zero Rating on domestic Purchases of Capital Equipment and raw
materials used in manufacturing and processing of products and importation of source documents shall
apply.

Capital equipment refers to Machinery, equipment, major components thereof, fittings and
accompaniments which are directly reasonably needed in the registered activity of the registered
enterprise.

Source Documents refer to input materials and documents reasonably needed by IT and IT enabled
industries such as, but not limited to, books, directories, magazines, newspapers, brochures, pamphlets,
medical records, legal files, instruction materials and drawings/blueprints/outlines.