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23 October 2013

SBMA tax break guidelines out

THE SUBIC Bay Metropolitan Authority yesterday released the registration guidelines for aviation and logistics companies in the economic zone that are seeking import tax breaks.

According to Resolution No. 13-05-4772 published yesterday, locators in Subic Bay Freeport Zone (SBFZ) “shall be allowed admissions of TEDFA (tax-exempt and duty-free aircraft), engines, parts and accessories on the premise that the units shall be used primarily in support of and in furtherance to the business operations of the locator in the SBFZ.”

“The minimum condition set by SBFZ is that the units are principally based in SBFZ ... and that these TEDFA return [to], stay [in], and use SBFZ as their core base of operations such that at the end of each flying sortie, these TEDFA return [to], stay [in], use and maintain physical presence at the SBIA (Subic Bay International Airport),” read the notice.

If these conditions are not met, locators will have to pay duties and taxes for their aircraft, engines, parts and accessories.

Another condition is that locators should have “sufficient, reasonable hangar space [to] justify the need for admission of aircraft units in relation to their business operation in Subic.”

Otherwise, locators will have to prove that they have put up actual investment of at least P100 million, read the notice.

Locators are also prohibited from transferring ownership of TEDFA within three years of admission.

Those who fail to observe the guidelines will have to pay P250,000 as well as duties and taxes if TEDFA units were sold to an entity not entitled to tax incentives. Another fine of P250,000 will also be charged to those who fail to prove active hub presence in Subic.

The SBFZ, 110 kilometers north of Manila, was established in 1992 as the country’s first freeport zone after the closure of the American naval base there. (Daryll Edisonn D. Saclag, BusinessWorld)

http://www.bworldonline.com/content.php?section=Economy&title=SBMA-tax-break-guidelines-out&id=78263

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