PEZA Clarifies Guidelines on the Issuance of the Certificate of Entitlement to Tax Incentives under CREATE Act

The Philippine Economic Zone Authority (“PEZA”) issued Memorandum Circular (“MC”) No. 2022-054 on 03 August 2022 to provide further guidelines on the issuance of the Certificate of Entitlement to Tax Incentives (“CETI”) in relation to MC No. 2022-025 it issued on 07 April 2022. The PEZA clarified that it shall issue the CETI in accordance with the CREATE Act.

Under MC No. 2022-054, the registered business enterprise (“RBE”) shall apply for a CETI prior to filing of the Income Tax Return (“ITR”). This CETI, which shall be attached to the ITR filed with the BIR, will serve as confirmation that the registered project is entitled to either the Income Tax Holiday (“ITH”) or the 5% Special Corporate Income Tax for a particular accounting or taxable period. Each registered activity shall be issued a separate CETI which contains the income tax incentive activity.

After PEZA has verified RBE’s compliance with the terms and conditions of its registration, it shall issue the CETI. The request for CETI will only be processed if the performance data for the year covered is complete and the entitlement to ITH of RBE’s project/s have been validated/ confirmed.

It was also provided in the said MC that the request for a CETI shall be filed within ninety (90) days prior to the statutory deadline for filing of the Annual ITR.