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Republic of the Philippines
PHILIPPINE ECONOMIC ZONE AUTHORITY
Roxas Boulevard corner San Luis Street
Pasay City
CERTIFICATE OF BOARD RESOLUTION This is to certify
that at the Board Meeting of the Philippine Economic Zone Authority held
on 06 October 1999, during which a quorum was present, the following resolution
was approved:
RESOLUTION NO. 99-264
RESOLVED, That the following shall be the Guidelines
for the Establishment and Operation of Information Technology (IT) Parks:
- DEFINITION - Information Technology or IT is the
collective term for the various technologies involved in processing
and transmitting information which include computing, multimedia, telecommunications,
microelectronics, and their interdependencies. Also called “informatics”
or “telematics”, the term IT now more often refers to the convergence
of various information-based, broadcast, and mass media communication
technologies (NITC, 1997).
- LOCATION - IT Parks may be located in any suitable
location: Provided, That in the National Capital Region (NCR) IT Parks
shall be allowed to serve as locations only for service-type projects
with no manufacturing operations.
- AREA - IT parks shall have a minimum area of five
(5) hectares.
- REGISTRABLE ACTIVITIES - IT Parks shall serve as
locations for the following PEZA registrable activities:
- Software development for business, e-commerce, education and
entertainment;
- Content development for multimedia or internet purposes;
- Hardware design, prototype production and related activities;
- Knowledge and computer-based support service activities such
as, but not limited to, the following:
- Regional/worldwide software support
- Data encoding and conversion
- Internet facilitation
- Systems integration
- Project implementation
- IT consultancy
- Call center
Research and development services;
- Other related IT and computer-based services/activities as may
be identified and approved by the PEZA Board; and
- Manufacturing facilities for IT Parks outside NCR.
E. INFRASTRUCTURE REQUIREMENTS - Developers of IT Parks
shall install sufficient insfrastrutures and utilities to ensure that
IT service exporters shall have access to the following:
- High-speed fiber-optic telecommunication backbone and high-speed
international gateway facility or wide-area network (WAN);
- Clean, uninterrupted power supply;
- Computer security and building monitoring systems (e.g. computer
firewalls, encryption technology, fluctuation controls, etc.);
- IT Research and development center and educational facilities; and
- IT business and technology incubation centers which will provide
prospective locators not only with ready-to-occupy physical facilities
for office and production spaces but also services needed by IT service
exporters (e.g. secretarial, communications, administrative and other
support services).
The IT Park may also provide facilities and services catering to the
needs of IT service exporters, and their executives and personnel, as
follows:
- Executive and staff housing/accommodations;
- Conference facilities, seminars/training/exhibit rooms and other
facilities and services for business group activities;
- Physical fitness, health improvement, medical and sport facilities;
- Facilities and services for social and recreational activities; and
- Other facilities that complement the IT community’s educational,
social and cultural requirements.
F. INCENTIVES FOR IT PARKS DEVELOPERS/OPERATORS
IT Parks Developers/Operators shall qualify for availment of the
following incentives, subject to such conditions as may be prescribed
by the PEZA Board:
- Income Tax Holidays (ITH), subject to the provisions of Executive
Order No. 226 (EO 226) and the Investment Priorities Plan (IPP):
- Four (4) years for IT Parks located outside the National Capital
Region, the Provinces of Cavite and Laguna, as provided under EO
226 and the IPP;
- Six (6) years for IT Parks located in less developed areas identified
in the IPP.
Developers/Operators of IT Parks not entitled to the ITH may avail of
the Special 5% tax on gross income incentive in lieu of the national
and local taxes;
- For IT Parks Developers/Operators entitled to ITH, option to waive
the ITH in favor of immediate availment of five percent (5%) gross income
tax incentive, in lieu of all national and local taxes, except real
property tax on land owned by developers. Otherwise, the said 5% gross
income tax scheme shall apply after the expiration of the ITH period;
- Permanent resident status for foreign investors and immediate family
members with initial investment of at least US$150,000.00, subject to
such guidelines as may be prescribed by the PEZA Board;
- Employment of foreign nationals; and
- Simplified customs procedures.
G. INCENTIVES FOR IT SERVICE EXPORTERS AND EXPORT PROCEDURES
OF IT-RELATED PRODUCTS
IT service exporters and export producers of IT-related products shall
qualify for availment of the following incentives, subject to such conditions
as may be prescribed by the PEZA Board:
- Income Tax Holidays (ITH), for firms located I IT Parks for the period
as follows:
- New registered pioneer firms - six (6) years from commercial operations
- New registered non-pioneer firms - four (4) years from commercial
operations
- Expanding firms - three (3) years from commercial operations
IT service type exporters locating in the National Capital Region may
also qualify for availment of the ITH.
- Exemption from all government imposts, fees, licenses and taxes.
However, during the ITH period, the enterprise shall pay real property
tax except on: (a) machinery owned by zone registered enterprises which
are actually installed and operated in the park for the first 3 years
of operation; and (b) production equipment of machinery, not attached
to real estate, used directly or indirectly in the production, assembly
or manufacture of the registered product of the zone registered product
enterprise;
- After the ITH period, the option to avail of exemption from national
and local taxes, in lieu thereof, the enterprise shall pay a 5% tax
on gross income earned;
- Exemption from duties and taxes on imported capital equipment, spare
parts, raw materials and supplies;
- Exemption from wharfage dues, export tax, impost or fee;
- Additional deduction equivalent to 50% of training expenses, chargeable
against the 3% national government share in the 5% tax on gross income;
- Unrestricted use of consigned equipment;
- For the first five years of operation, additional deduction equivalent
to 50% of the wages paid corresponding to the increment in the number
of direct labor for skilled and unskilled workers, subject to such conditions
as may be prescribed by the PEZA Board;
- Permanent residents status for foreign investors with initial investment
of at least US$150,000.00, subject to such guidelines as may be prescribed
by the PEZA Board;
- Employment of foreign nationals;
- Domestic sales allowance equivalent to 30% of total export sales,
subject to such conditions as may be prescribed by the PEZA Board;
- Exemption from SGS inspection; and
- Simplified customs procedure.
H. INCENTIVES FOR FACILITIES/UTILITIES ENTERPRISES WITHIN THE
IT PARK
Subject to certain conditions that may be prescribed by the PEZA Board,
a facility and/or utility enterprise within the IT Park shall be granted
the following incentives:
- Option to pay a special 5% tax on gross income earned, in lieu of
all national and local taxes;
- Additional deduction equivalent equivalent to 50% of training expenses,
chargeable against the #% national government share in the 5% tax on
income, subject to PEZA Board approval;
- Permanent residents status for foreign investors with initial investment
of at least US$150,000.00, subject to such guidelines as may prescribed
by the PEZA Board;
- Employment of foreign nationals;
- Simplified customs procedures; and
- Incentives under Book 1 of EO 226 as may be determined by the PEZA
Board in accordance with the pertinent provisions of EO 226 and the
Investment Priorities Plan.
Should the Developer/Operator decide to provide the utility requirements
(power, telecommunications, water, etc.) of the IT Park, it should be
required to create a new and separate entity to handle exclusively the
said undertaking. The said entity, upon registration with PEZA, shall
be entitled to the above-mentioned incentives.
ATTY. B. MARC A. CANUTO
Corporate Secretary
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