Question & AnswerQ&A (TIEZA Resolution No. R-15-12-14)
Accommodation Establishments include hotels, tourist inns, motels, apartelles, resorts, home stays, pension houses and the accompanying facilities and services.
Capital Equipment refers to equipment that are directly and actually needed and shall be exclusively used by the TEZ Operator and/or the Registered Tourism Enterprise in its registered activity.
Capital Investment refers to the acquisition of capital assets or fixed assets that are expected to be productive in many years.
A Registered Tourism Enterprise is a facility, service, or attraction primarily engaged in whole or in part in tourism and for the purpose of attracting visitors to and within the Philippines, which is duly registered with the TIEZA.
Substantial Expansion refers to the expansion, renovation or upgrade of physical assets amounting to at least 50% of the original investment of the Tourism Enterprise.
Incentives shall initially be granted only to Primary Tourism Enterprises which include Travel and Tour Facilities and Services, Transport Facilities and Services exclusively for tourist use, Accommodation Establishments and accompanying facilities, Convention and Exhibition Facilities and Services, Tourism Estate Management Facilities and Services, and other enterprises identified by the Secretary after consultation.
Incentives may be granted by TIEZA within ten years from the effectivity of the Act, but incentives granted prior to the expiration of the ten-year period shall continue until fully realized.
The income tax holiday incentive may be extended but not to exceed a total additional period of six (6) years, provided that the registered enterprise undertakes a Substantial Expansion prior to expiration of the initial six (6) years.
They must undertake a Substantial Expansion; the expansion or upgrade must result in an extension of the life of assets or increase capacity or efficiency benefiting current and future periods; and in some cases, there must be a significant change in its category classification under the Department of Tourism's accreditation system.
Yes, enterprises outside the TEZ can avail themselves of the income tax holiday incentive by applying for registration. They are entitled to a non-extendible income tax holiday not exceeding six years from completion of expansion or upgrade, provided they undertake a Substantial Expansion, that such expansion results in extension or increased capacity or efficiency, and in relevant cases, a significant change in tourism category classification.
They are entitled to import Capital Investment and Equipment free of taxes and duties when necessary for expansion, renovation, or upgrade.
The Board may allow an enterprise with an expansion or upgrade of less than 50% of the Original Investment to avail of the income tax holiday incentive in exceptionally meritorious cases, but the period of availment shall be prorated to the value of the expansion or upgrade.