IT-BPM firms allowed to move assets out of ecozones to support WFH staff

Information technology and business process management (IT-BPM) firms in special economic zones will be allowed to deploy equipment—previously prohibited from being removed from company premises due to their duty-free status—to support the bulk of their employees’ work from home (WFH) schemes.

Thus said the Fiscal Incentives Review Board (FIRB), which recently released guidelines allowing IT and BPM enterprises in economic zones to adopt a 90-percent workfrom-home arrangement up to March 31, 2022, because of the COVID-19 pandemic.

The policy was set by the agency to address work constraints brought about by the pandemic in accordance with implementing rules and regulations of the Corporate Recovery and Tax Incentives for Enterprises Act, which gives investment promotion agencies the authority to implement temporary measures as long as these are approved by the FIRB to help registered business enterprises recover from a pandemic, national emergencies or major disasters.

Signed by Finance Secretary and FIRB Chair Carlos Dominguez III, the memo gave registered firms in the IT-BPM sector up to the end of this month to submit to their respective investment promotion agencies their total number of employees and the number of employees under the WFH arrangement; and a detailed list of the laptops, desktops, and other equipment and assets brought out of the economic or freeport zones.

Guidelines

This list should include the quantity of the assets, their acquisition cost and book value, and the amount of bond paid to cover 150 percent of the amount of taxes and duties, if imported, and value-added tax, if locally sourced, of the equipment and assets taken outside the ecozones.

“Bonds shall be posted for all equipment deployed by the registered business enterprises to their employees’ homes, to ensure payment of taxes and duties if any such equipment is not returned to the site of the [company] after the WFH arrangement,” said the memo addressed to all heads of investment agencies and IT-BPM firms.

The guidelines likewise require that, within five days after the end of each month, registered firms should submit to their investment promotion agencies a report on any additional equipment and other assets brought out of the economic or freeport zones, and the current total number of employees and number of employees under the WFH arrangement.

Certification

The companies are given up to the end of this month to submit to their investment agencies a certification that the export requirement and the number of employees will be maintained.

“Noncompliance with the conditions may result in suspension, withdrawal, or cancellation of tax incentives of the [companies],” according to the memo.

Under the agency’s resolution, the WFH arrangement will be allowed until Jan. 1, 2022, after which a 75-percent ceiling will be imposed until March 31, 2022. If the state of calamity is extended beyond Jan. 1 next year, the ceiling will be maintained at 90 percent until the end of March 2022.

President Duterte recently extended the state of calamity in the country until Sept. 12, 2022.