CDC locators’ exemption of duties remains

CLARK FREEPORT — The Clark Development Corporation continues to provide duty exemption to Clark Freeport locators on imports under the Corporate Recovery and Tax Incentives for Enterprises Act or the CREATE Act.

According to the CDC, locators who are classified as Domestic Market Enterprises may avail of this perk prior to the passage of the said Act.

Assistant Secretary of Finance and Head of the FIRB Secretariat Juvy C. Danofrata also cited a letter from the Fiscal Incentives and Review Board stating that “all Registered Business Enterprises availing of the transitory provisions under CREATE Act may continue to avail of non-income related tax incentives subject to the provisions under Rule 18, Section 5 of the CREATE Act and its Implementing Rules and Regulations.”

CDC president and CEO Atty. Agnes Devanadera confirmed the statement, who later sent an inquiry to the FIRB on whether the RBEs classified as DMEs availing of transitory provisions under CREATE Act may continuously avail non-income related tax incentives such as the duty-free importations.

The FIRB replied to CDC, stating that the duty exemption on importation of capital equipment raw materials, spare parts, and accessories incentive may still be enjoyed by the transitory DMEs provided that they were availing such incentive at the time that the CREATE Act became effective.

Meanwhile, the FIRB also mentioned in its letter that Value Added Tax exemption on importation and VAT zero-rating on local purchases incentives may no longer be availed by DMEs, as this can only be availed as a set of incentives for transitory Export Enterprises.

“Duty exemption, VAT exemption on the importation, and VAT zero-rating on local purchases must be read as the set of incentives available to transitory RBEs classified as Export Enterprises. Such incentive, as a set, thus, cannot be availed by DMEs. Nonetheless, DMEs can be allowed to continue availing of the duty-free incentive on importation,” the FIRB said.

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