Law Summary

Introduction

Executive Order No. 569, issued on November 23, 1979, by President Ferdinand E. Marcos, authorizes the Board of Investments (BOI) to extend the period of availment of incentives and increase the rates of tax exemptions for registered enterprises under specific conditions.

Authority of the Board of Investments

• Legal Principle: The BOI is granted the authority to extend incentive availment periods and increase tax exemption rates for registered enterprises under specific laws.

• Key Definitions:

  • Registered Enterprise: A business entity registered under the applicable laws (R.A. 5186, R.A. 6135, P.D. 1159).
  • Incentives: Benefits granted to registered enterprises, including tax exemptions.

• Requirements:

  • The extension of incentives can be granted for a period not exceeding five (5) years.
  • The increase in tax exemptions shall not exceed fifty percent (50%) of the current tax exemption enjoyed by the enterprise.

Criteria for Incentive Extension

• Important Requirements:
  • The registered enterprise must meet at least one of the following criteria to qualify for incentives: • Suffered heavy financial losses and is in a distressed condition. • Experienced operational force majeure impairing viability. • Did not fully utilize the incentives for reasons beyond its control. • The project has a gestation period surpassing the current incentive availment period. • Faced unforeseen changes in government policies affecting competitiveness.

Additional Procedures

• Mandatory Presidential Authority:
  • For cases not covered by the specified criteria, the BOI must seek the President's authority to extend incentives or increase tax exemptions.

Repeal of Inconsistent Laws

• Legal Modification:
  • All laws, decrees, executive orders, administrative orders, rules, or regulations inconsistent with this Executive Order are repealed, amended, or modified accordingly.

Effectivity

• Timeframe:
  • The Executive Order takes effect immediately upon issuance.

Key Takeaways

• Executive Order No. 569 empowers the BOI to extend and increase tax incentives for registered enterprises facing financial difficulties or other listed challenges.
• The initiative aims to support industrial growth and development in the Philippines.
• Strict criteria must be met for incentives to be granted, and the BOI must consult the President for cases outside the outlined conditions.
• This order supersedes any inconsistent laws or regulations, ensuring a unified approach to enterprise incentives.