Deferral of the Certificate of Non-Local Availability (CNLA) Requirement under FIRB Administrative Order (AO) No. 001-2023

February 23, 2023 FIRB ADMINISTRATIVE ORDER NO. 002-2023 FOR : All Heads of Investment Promotion Agencies (IPA), All Registered Business Enterprises (RBEs) in the Information Technology-Business Process Management (IT-BPM) Sector Registered with the Board of Investments (BOI), Bureau of Customs (BOC), Bureau of Internal Revenue (BIR) and the Department of Finance-Revenue Office SUBJECT : Deferral of the Certificate of Non-Local Availability (CNLA) Requirement under FIRB Administrative Order (AO) No. 001-2023 WHEREAS , pursuant to Section 295 (C) (1) of the National Internal Revenue Code (NIRC or Tax Code), as amended by the CREATE Act, the duty exemption shall only apply to the importation of capital equipment, raw materials, spare parts, or accessories which are not produced or manufactured domestically in sufficient quantity or of comparable quality and at reasonable prices; WHEREAS , pursuant to Rule 2, Section 4 (B) (3) of the IRR of the CREATE Act, as amended, registered export and domestic market enterprises shall enjoy exemption from customs duties on their importation of capital equipment, raw materials, spare parts, and accessories for their registered project or activity; Provided , that the capital equipment, raw materials, spare parts, or accessories are not produced or manufactured domestically in sufficient quantity or of comparable quality and at reasonable prices; Provided, further, that for a period of one year from the issuance of the said IRR, the Certificate of Authority to Import (CAI)/admission entry shall be used to satisfy this condition. The IPA shall furnish the Department of Trade and Industry (DTI) with copies of the issued CAI/admission entry every 5th day of the month. After the expiration of the one-year period, the IPAs shall secure from the DTI the CNLA in compliance with this condition; WHEREAS , pursuant to FIRB AO No. 001-2023, a CNLA is one of the requirements to process a tax exemption indorsement (TEI) from the Department of Finance-Revenue Office (DOF-RO) for new goods imported starting 1 February 2023; WHEREAS , the DOF and DTI are currently drafting a joint memorandum circular to operationalize Rule 2, Section 4 (B) (3) of the IRR of the CREATE Act; In this regard and to avoid further impediments to the ongoing import activities of the affected IT-BPM RBEs, it is necessary to defer the submission of the CNLA as required under FIRB Administrative Order 001-2023, in the processing of the TEI, for importations starting 1 February 2023, specific to IT-BPM RBEs, which have registered with the BOI pursuant to FIRB Resolution No. 026-22, as amended, allowing IT-BPM RBEs to adopt up to 100% WFH arrangements, pending the issuance of the joint memorandum circular to operationalize Rule 2, Section 4 (B) (3) of the IRR of the CREATE Act. The BOI shall also furnish the DOF-RO with a master list of IT-BPM RBEs registered with the BOI pursuant to FIRB Resolution No. 026-22, as amended, in order to validate if the TEI application is duly covered by the CNLA deferment. This Administrative Order shall take effect immediately. (SGD.) JUVY C. DANOFRATA Assistant Secretary of Finance and Head of the Fiscal Incentives Review Board (FIRB) Secretariat