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Application for ITH availment

Application for ITH availment

Companies enjoying income tax holiday (ITH), whether under the PEZA or BOI law, are reminded to comply with the requirement for annual filing of an application for ITH availment.

The Court of Tax Appeals, in a decision promulgated on July 31, 2006, upheld BIR's assessment of deficiency income taxes on a BOI-registered company for its failure to submit an application for ITH availment.  The CTA pointed out that the "Specific Terms and Conditions" of the certificates of registration issued to BOI-registered companies indicate that the company must file an incentive application within one month from the filing of its final ITR.  Failure would mean imposition of penalties including possible forfeiture of incentives or non-acceptance of the ITH application.

The same requirements are specified under a 1991 circular on ITH availment of EPZA firms which, according to PEZA, has also been adopted for PEZA-registered enterprises.

Under the rules of both the PEZA and BOI, the application for ITH availment is due within one month from the filing of the annual income tax return (ITR) with the BIR. If a tentative ITR was filed, the ITH application should be submitted within one month from the filing of the final/amended ITR or within one month after the lapse of three-year period within which to file the final ITR.

An application form is prescribed for this purpose.

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