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Compliance Reporting Requirements in Philippines: What You Need to Know

The Philippine Economic Zone Authority (PEZA) and Fiscal Incentives Review Board (FIRB) have introduced significant changes in the implementation of Republic Act No. 11534 or the CREATE Law, effective from January to June 2022.

Reporting Requirements

To help Registered Business Enterprises (RBEs) track PEZA-mandated requirements, below is a list of reporting requirements and deadlines set by the PEZA Implementing Rules and Regulations (IRR):

  • Economic Zone Monthly Performance Report (EZMPR): every 20th day of the following month
  • Quarterly Income Tax Returns (ITR) (BIR Form 1702Q): 15 days after filing with the BIR
  • Annual ITR (BIR Form 1702) and Audited Financial Statements: 30 days after filing with the BIR
  • COA Annual Audit Report: after the end of the year with an Audit Certificate
  • General Information Sheet: 30 days after filing with the Securities and Exchange Commission (SEC)
  • Amendment of Articles of Incorporation or By-Laws: 30 days after registering with SEC
  • Replacement of Board of Director/Member/Officer, Change of Corporate Name & Equity Ownership: 30 days after the said change

Penalties for Non-Submission

The non-filing and late submission of these requirements are subject to penalties under Section 8 Rule XXV of the PEZA IRR. The penalties include:

  • P100,000 for the first violation
  • P500,000 for the second violation
  • Cancellation of registration for the third violation

Additional Compliance Requirements

Other compliance requirements include:

  • WORK-FROM-HOME (WFH) COMPLIANCE REPORT: RBEs must comply with the prescribed WFH threshold to avoid suspension of fiscal and non-fiscal incentives.
  • CERTIFICATE OF ENTITLEMENT TO TAX INCENTIVES (CETI): RBEs must secure CETI before filing the Annual ITR.
  • VALUE-ADDED TAX (VAT) ZERO-RATING CERTIFICATE: RBEs do not need to request a certified true copy of the PEZA-issued VAT zero-rating certificate.

Payment of Fines and Administrative Penalties

Payment of fines for non-compliance with reporting requirements does not exclude the imposition of other administrative penalties such as suspension of incentives and permits, cancellation/revocation of registration, among others.

Conclusion

To ensure compliance, it is crucial for RBEs to keep abreast of the latest issuances and advisories. The government’s objective of making doing business easier may be challenged by these numerous compliance requirements.