PEZA Compliance

PEZA Compliance Services in the Philippines

AHC Certified Public Accountants Limited Co. offers PEZA Post-Registration Services to enterprises in the Philippines. We aid businesses in maintaining their Income Tax Holiday entitlements and renewing their PEZA Certifications. We also assist registered companies with the completion and submission of their documentary requirements before the prescribed deadlines.

PEZA Compliance - ims-min

The Philippine Economic Zone Authority (PEZA) is the government agency mandated to promote investments in the Philippines. PEZA facilitates the operations of investors in different industries inside its Special Economic Zones (SEZs) and administers fiscal and non-fiscal incentives to qualified businesses.

According to Section 4(a) of The Special Economic Zone Act of 1995 (R.A. 7916), SEZs are special areas developed or with “the potential to be developed” into industrial and commercial districts. Manufacturing Economic Zones, Tourism Economic Zones, and Information Technology Parks are examples of economic zones in the Philippines.

PEZA’s Eligibility Requirements

Business owners can only register with PEZA and qualify for benefits and privileges, such as tax breaks and incentives, if they meet the following requirements:

Existing PEZA-registered enterprises are advised to annually revalidate their PEZA Certificate of Available Incentives and Income Tax Holiday (ITH) Entitlement to continuously avail the benefits granted to them every year.

PEZA’s Post-Registration Requirements

PEZA requires all registered enterprises to comply with their requirements and submit reportorial documents every fiscal year. Under Section 8(a) of PEZA’s Implementing Rules and Regulations, businesses can be penalized “for late filing of financial statements, Income Tax Returns (ITR), performance reports, annual reports, and all other reports/documents.”

PEZA’s post-registration requirements are listed below for your reference:

1. Application for Approval of Start of Commercial Operations (SCO)

This application serves as a one-time prerequisite that validates your ITH Incentives and PEZA Certificate of Available Incentives. Once approved, PEZA will release a notarized certification of your company’s confirmed SCO date (ERD.2.F.005).

2. Revalidation of ITH Entitlement

  • Validation of Machinery and Equipment
    PEZA will issue a Notice of Confirmation after you comply with the required amount of investment in machinery, equipment, and investment cost per seat.
  • Value-Added Tax (VAT) Zero-Rating and Available Incentives
    The PEZA Certificate of Available Incentives can be secured after you receive the Approval of SCO and Validation of ITH Incentives. This certificate cites the given incentives and the conditions established for PEZA-registered entities.

3. Renewal of PEZA Certification

  • Renewal of PEZA Certificate of Available Incentives
    After you receive the Approval of SCO and Validation of ITH Incentives, you can secure the renewed certificate. It includes conditions for incentives availment and available list of incentives for your enterprise.
  • Renewal of VAT Zero-Rating Certificate
    The VAT Zero-Rating Certificate confirms your compliance with PEZA’s requirements for registration. It also enumerates the fiscal incentives your PEZA-registered business can receive in a business year.

4. Reportorial Requirements

  • Monthly Reports
    1. Economic Zone Monthly Performance Report (EZMPR)
      PEZA monitors the performance of all registered enterprises inside SEZs through the EZMPR. The report contains the officer’s details, employment data, salaries, sales, imports, local purchases, power utilization data, and labor concerns.
    2. Monthly Summary Report of Local Sales (For Information Technology (IT) Companies only)
      Before IT Companies can render local sales of IT services, they must secure a Letter of Authority (LOA) issued by PEZA’s head office. Local sales for domestic markets must be covered by a monthly summary report.
    3. Labor Situationer Marketing Report
      PEZA will monitor your organization to address problems  relating to labor management in your PEZA-registered enterprise. This form contains all concerns regarding your workforce and its current state.
  • Quarterly Reports
    1. Quarterly ITR
      As part of PEZA’s reportorial guidelines, companies are required to submit their Quarterly ITR and proof of payment with the Bureau of Internal Revenue (and Local Government Unit, if applicable). Enterprises report their income, expenses, and other tax details to BIR.
  • Annual Reports
    1. Annual ITR
      Enterprises must file the Annual ITR together with the breakdown or schedule of sales per activity, other income earned outside of operations, and their data on revenues and taxes paid for the fiscal year.
    2. Annual Report on Actual Operations
      This document summarizes the yearly operations of business owners and their registered activities with PEZA. It includes the details of an enterprise’s import data, production and sales, labor data, fuel usage, and domestic data.

5.  Tax Incentives Management and Transparency Act (TIMTA) Reports

The Tax Incentives Management and Transparency Act (TIMTA) requires Investment Promotion Units (IPUs) in the Philippines to verify if their reports on tax incentives are consistent with BIR’s data. An IPU, like PEZA, is a government agency mandated to attract and promote investments in the Philippines by facilitating investment activities and developing SEZs to make the country an investment destination of choice.

We help companies assess their eligibility for availing tax incentives from PEZA and provide assistance on the registration process. Upon successful registration, we also aid them in securing compliance on PEZA’s ongoing requirements. We are dedicated to compile our client’s  reportorial requirements and accomplish their engagements with PEZA so they can maintain their eligibility for the incentives granted to their enterprise.

Need Assistance with Your Post-Registration Compliance with PEZA?

We offer post-registration services to assist you in filing reportorial documents, renewing your certifications, and validating your ITH incentives with PEZA.