BUSINESS INCENTIVES
- Tax Exemptions Tax and duty-free exemptions on imported raw materials, supplies, capital, equipment and other items for consumption within the Freeport.
- No national and local taxes/fees: such as value-added taxes, excise and ad valorem taxes, property tax, franchise tax and local government fees on permits.
- Exemption from all local and national taxes only a 5% final tax on gross income earned from activities within the Freeport computed based on Gross Sales less the following “allowable deductions” depending on the activities such as manufacturing, infrastructure, development and service, in reference to Section 57 of the Rules and Regulations implementing R. A 7227, as amended by R.A. 9400.
| Deductible item: | Non-deductible item: |
|---|---|
| Direct labor | Administrative Staff salary |
| Indirect artificial materials | Management salary line |
| Factory supplies and fuel | Sales staff salary |
| Depreciation of factory buildings and equipment | Interest on working capita |
| Loan interest loan facility | Exchange of lost assets |
| Rental and water and electricity costs | Loss of advertising costs |
| Semi-finished product | Insurance fee |
| Miscellaneous expenses | |
| Communication cost |
- 100% foreign ownership (except for activities where foreign ownerships are restricted by the Philippine Constitution)
- Liberal foreign exchange regulations.
- Access to domestic market of up to 30% of its production. SBF enterprises may generate income from sources within the Customs Territory of up to thirty percent (30%) of its total income from all source.
