FIRB allows IT-BPM firms to be transferred to BOI jurisdiction

The Fiscal Incentives Review Board (FIRB) has allowed registered Information Technology and Business Process Management (IT-BPM) companies to be transferred from the jurisdiction of economic or freeport zones to the Board of Investments (BOI) in light of hybrid work arrangements.
 
Finance Secretary and FIRB chairperson Benjamin Diokno said that the decision would allow these firms to continue availing of fiscal incentives without violating Section 309 of the National Internal Revenue Code of 1997, as amended by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
 
The provision states that to be entitled to incentives, the conduct of registered projects or activities must be within the geographical boundaries of the ecozone or freeport administered by the concerned investment promotion agency (IPA). 
 
The BOI is the only IPA not affected by boundary constraints or zone limits. 

“We recognize that the work-from-home (WFH) arrangement is the new business model of most of the registered business enterprises (RBEs). Hence, it is high time to resolve this issue faced by IT-BPM enterprises,” Diokno said in a statement.
 
The inter-agency body has also extended the work-from-home arrangement for the IT-BPM sector until December 31, 2022. 
 
President Ferdinand “Bongbong” Marcos Jr. earlier this week extended until December 31, 2022 the state of calamity across the country due to the COVID-19 pandemic.

Diokno said the extension would allow the seamless transfer of RBEs in the IT-BPM sector to the BOI.
 
The availment of the tax incentives should be continued subject to the transitory provisions under the CREATE Act, which has no express or implied prohibition against this scheme, the Finance chief said.
 
“We expect the cooperation and utmost commitment of all concerned IPAs and RBEs on this matter as we carry out the transition and conclusively address the enduring WFH problem,” Diokno said.
 
The Information Technology and Business Process Association of the Philippines (IBPAP) has long been pushing for a gradual transition from remote work to on-site arrangements. — VBL, GMA News