Approving the Guidelines for the Suspension or Withdrawal of Tax Incentives and Cancellation of CORs of RBEs

March 30, 2023 FIRB RESOLUTION NO. 020-23 WHEREAS , Section 297 (A) of the NIRC of 1997, as amended by the Republic Act No. 11534, otherwise known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, expanded the functions of the Fiscal Incentives Review Board (FIRB) to include policy-making and oversight functions on the administration and grant of tax incentives by the Investment Promotion Agencies (IPAs); TIADCc WHEREAS , under Section 297 (E) of the National Internal Revenue Code (NIRC) of 1997, as amended, the FIRB may cancel, suspend, or withdraw the enjoyment of fiscal incentives of concerned registered business enterprises (RBEs) on its own initiative or upon the recommendation of the IPA for material violations of any of the conditions imposed in the grant of fiscal incentives, including, but not limited to, non-compliance with the agreed performance commitments and endorse RBEs whose incentives are cancelled, suspended, or withdrawn to the concerned revenue agencies for the assessment and collection of taxes and duties due commencing from the first year of availment; WHEREAS , under Section 308 of the NIRC of 1997, as amended, after due process, the FIRB or the concerned IPA, as the case may be, may cancel the registration or suspend the enjoyment of incentives of any registered enterprise and/or require a refund of incentives enjoyed by such enterprise, including interests and monetary penalties, for any material misrepresentation of information for the purpose of availing more incentives than what it is entitled to under the law; WHEREAS , Section 308 of the NIRC of 1997, as amended, likewise provides for the imposition of penalties upon RBEs or other registered enterprises which fail to comply with the filing and reportorial requirements such as, but not limited to, the Annual Tax Incentives Report (ATIR) and Annual Benefits Report (ABR), with the appropriate IPAs, which fail to show proof of filing of tax returns using the electronic system for filing and payment of taxes of the Bureau of Internal Revenue (BIR) under Section 305 of the NIRC of 1997, as amended; WHEREAS , Rule 8, Section 5 of the CREATE Act Implementing Rules and Regulations (IRR), as amended, in relation to Section 304 of the NIRC of 1997, as amended, provides that the availment of incentives shall be subject to the requirements and conditions set forth in the Strategic Investment Priority Plan (SIPP) and performance review by the concerned IPA; WHEREAS , to impose the suspension or withdrawal of tax incentives or cancellation of the Certificate of Registration (COR) of the RBEs found to have committed certain violations, there is a need to provide guidelines for the issuance of suspension, withdrawal, and cancellation orders to supplement the existing guidelines of IPAs. cSEDTC NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED , That the Board, by virtue of the powers vested in it under Section 297 (L) of the NIRC of 1997, as amended, hereby APPROVES the Guidelines for the Suspension or Withdrawal of Tax Incentives and Cancellation of Certificate of Registration (COR) of Registered Business Enterprises (RBEs) pursuant to the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act (RA) No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act , herein attached as Annex A (FIRB Administrative Order No. 004-23). RESOLVED, FURTHER , That the said Guidelines shall cover the suspension or withdrawal of tax incentives and cancellation of CORs made by the IPA or the FIRB, as the case may be, of registered projects or activities of RBEs during the effectivity of the CREATE Act. RESOLVED, FINALLY , That the said Guidelines shall take effect immediately upon publication in a newspaper of general circulation. This resolution may be signed in any number of counterparts, each of which, when duly executed and sent by facsimile or electronic transmission to the Secretariat, shall be valid and effectual as if executed as an original, but all the counterparts (including counterparts sent by way of facsimile or electronic transmission) shall together constitute one and the same document. Adopted by the Board in its meeting on 30 March 2023, where a quorum was present. (SGD.) AMENAH F. PANGANDAMAN Secretary of Budget and Management (SGD.) ARSENIO M. BALISACAN Secretary of National Economic and Development Authority (SGD.) NAEALLA ROSE M. BAINTO-AGUINALDO Deputy Executive Secretary for General Administration (SGD.) ALFREDO E. PASCUAL Co-Chairperson and Secretary of Trade and Industry (SGD.) BENJAMIN E. DIOKNO Chairperson and Secretary of Finance ANNEX A FIRB Administrative Order No. 004-2023 May 2, 2023 Filed in the Office of the National Administrative Register on May 8, 2023.