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This page features the full text of
Republic Act No. 7369
AN
ACT GRANTING TAX AND DUTY EXEMPTION AND TAX CREDIT ON CAPITAL EQUIPMENT
REPUBLIC
ACT NO. 7369AN
ACT GRANTING TAX AND DUTY EXEMPTION AND TAX CREDIT ON CAPITAL EQUIPMENT
Section
1. Paragraph (c), Article 39,
Title III of the Omnibus
Investments Code of 1987 is hereby amended to read as follows:
"(c) Tax
and Duty Exemption on Imported Capital Equipment. — Until December 31,
1994, importations of machinery and equipment and accompanying spare
parts
of new and expanding registered enterprise shall be exempt to the
extent
of One hundred percent (100%) of the customs duties and national
internal
revenue tax payable thereon: Provided, That the importation of
machinery
and equipment and accompanying spare parts shall comply with the
following
conditions: chanrobles virtuallaw libraryred"(1) They
are not manufactured domestically in sufficient quantity, of comparable
quality and at reasonable prices; chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred"(2) They
are reasonably needed and will be used exclusively by the registered
enterprise
in the manufacture of its products, unless prior approval of the Board
is secured for the part-time utilization of said equipment in a
non-registered
activity to maximize usage thereof or the proportionate taxes and
duties
are paid on the specific equipment and machinery being permanently used
for non-registered activities;
"(3) The
approval of the Board was obtained by the registered enterprise for the
importation of such machinery, equipment and spare parts." In granting
the approval of the importations under this paragraph, the Board may
require
international canvassing but if the total cost of the capital equipment
or industrial plant exceeds US$5,000,000.00, the Board shall apply or
adopt
the provisions of Presidential Decree Numbered 1764 on International
Competitive
Bidding.chanrobles virtuallaw libraryred
"If
the registered enterprise sells, transfers or disposes these machinery,
equipment and spare parts without prior approval of the Board within
five
(5) years from the date of acquisition, the registered enterprise and
the
vendee, transferee, or assignee shall be solidarily liable to pay twice
the amount of the tax exemption given it. chanrobles virtuallaw libraryredchanrobles virtuallaw libraryred"The
Board shall allow and approve the sale, transfer, disposition of the
said
items within the said period of five (5) years if made:chanroblesvirtualawlibrary"(aa) to
another registered enterprise or registered domestic producer enjoying
similar incentives; chanrobles virtuallaw libraryred"(bb) for
reason of proven technical obsolescence; orchanrobles virtuallaw libraryredchanrobles virtuallaw libraryred"(cc) for
purposes of replacement to improve and/or expand the operations of the
registered enterprises."
Sec.
2. Paragraph (d), Article 39,
Title III of the same Code, is likewise amended to read as
follows:
"(d) Tax
credit on Domestic Capital Equipment. — A tax credit equivalent to One
hundred percent (100%) of the value of the national internal revenue
taxes
and customs duties that would have been waived on the machinery,
equipment
and spare parts, had these items been imported shall be given to the
new
and expanding registered enterprise which purchases machinery,
equipment
and spare parts from a domestic manufacturer: Provided, That (1) that
the
said equipment, machinery and spare parts are reasonably needed and
will
be used exclusively by the registered enterprise in the manufacture of
its products, unless prior approval of the Board is secured for the
part-time
utilization of said equipment in a nonregistered activity to maximize
usage
thereof; (2) that the equipment would have qualified for tax and
duty-free
importation under paragraph (c) hereof; (3) that the approval of the
Board
was obtained by the registered enterprise; and (4) that the purchase is
made on or before December 31, 1994. If the registered enterprise
sells,
transfers, or disposes of these machinery, equipment and spare parts,
the
provision in the preceding paragraph for such disposition shall apply."chanrobles virtuallaw libraryred
Sec.
3. For a period of three (3)
years starting January 1, 1995, the following imported articles shall
be
exempt from duties imposed under Section 104 of the Tariff and Customs
Code of 1978, as amended, and all kinds of levies provided by law or
presidential
decree:
(This
portion has been deleted)
Provided,
however, That the National Economic and Development Authority may, upon
due notice and public hearing, and in consultation with concerned
government
agencies, exclude any item from the foregoing list, subject to the
condition
that the machinery or equipment is being manufactured domestically in
sufficient
quantity, of comparable quality and at a reasonable price.chanrobles virtual law library
Sec.
4. Pursuant to the preceding
Section, a domestic manufacturer of any of the articles enumerated
therein
shall be entitled to a tax credit equivalent to one hundred percent
(100%)
of the national internal revenue taxes, customs duties and levies
actually
paid on the raw materials used in the manufacture of the article. The
purchaser
of such article shall likewise be entitled to a tax credit of one
hundred
percent (100%) of the value of the National Internal Revenue taxes,
customs
duties imposed thereon under Section 104 of the Tariff and Customs Code
of 1978, as amended, and levies provided by law or presidential decree
had such article been imported.chanrobles virtual law library
chanrobles virtuallaw libraryred
Sec.
5. As used in this Act, the term
domestic manufacturer shall mean a citizen of the Philippines, a
partnership
or any other association organized under Philippine laws, with at least
sixty percent (60%) of its capital owned and controlled by citizens of
the Philippines; a corporation or cooperative organized under
Philippine
laws with at least sixty percent (60%) of its capital stock outstanding
and entitled to vote owned and held by citizens of the Philippines, and
with at least sixty percent (60%) of the members of its Board of
Directors
being citizens of the Philippines.
Sec.
6. The Board of Investments (BOI)
shall issue certificates for the tax credit mentioned in Section 4
hereof
after evaluation as to whether the manufactured article falls under
Section
3 of this Act; Provided, however, That the domestic manufacturer has
not
availed of tax credits thereon under any other investment incentive
law,
order, rule or regulation: Provided, further, That availment of the tax
credit provided for under this Act shall bar the availment of tax
credits
under such other laws, orders, rules or regulations.cralaw:red
Sec.
7. The BOI shall formulate and
publish guidelines for the implementation of this Act in the Official
Gazette
and in any newspaper of general circulation within ninety (90) days
after
its approval. chanrobles virtuallaw libraryred
Sec.
8. All laws, decrees, orders,
issuances and rules and regulations or parts thereof inconsistent with
this Act are hereby repealed or modified accordingly.chanrobles virtuallaw libraryred
Sec.
9. This Act shall take effect
fifteen (15) days after the implementing rules have been published and
shall be in effect for five (5) years from the date of its
approval.cralaw:red
Approved:
April 10, 1992
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