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This page features the full text of
Republic Act No. 7459
"Investors
and Invention Incentives Act of the Philippines"
AN
ACT PROVIDING INCENTIVES TO FILIPINO INVESTORS AND EXPANDING THE
FUNCTIONS
OF THE TECHNOLOGY APPLICATION AND PROMOTION INSTITUTE, APPROPRIATING
FUNDS
THEREFOR, AND FOR OTHER PURPOSES.
REPUBLIC
ACT NO. 7459
AN
ACT PROVIDING INCENTIVES TO FILIPINO INVESTORS AND EXPANDING THE
FUNCTIONS
OF THE TECHNOLOGY APPLICATION AND PROMOTION INSTITUTE, APPROPRIATING
FUNDS
THEREFOR, AND FOR OTHER PURPOSES.
ARTICLE
I
TITLE,
POLICY PROGRAM AND DEFINITION OF TERMS
Section
1. Title. — This Act shall be
known as the "Investors and Invention Incentives Act of the
Philippines."
chanrobles virtuallaw libraryred
Sec.
2. Declaration of National
Policy
and Program. — It is hereby declared to be the national policy to give
priority to invention and its utilization on the country's productive
systems
and national life; and to this end provide incentives to investors and
protect their exclusive right to their invention, particularly when the
invention is beneficial to the people and contributes to national
development
and progress.chanrobles virtual law library
Pursuant
to the national policy, the Government shall provide a program to set
up
a climate conducive to invention and innovation, give encouragement and
support to inventors who are creative and resourceful, as well as the
imbued
with a deep sense of nationalism, and maximize the capability and
productivity
and inventors through incentives and other forms of assistance and
support.
Sec.
3. Definition of Terms. — chanrobles virtuallaw libraryred
(a) Inventor
refers to, for purpose of this Act, any patented machine, product,
process
including implements or tools and other related gadgets of invention,
utility
model and industrial design patents.chanrobles virtual law library chanrobles virtuallaw libraryred(b) Investor
refers to the patentee/s, heir/s, assignment/s, of an Invention letters
patent, Utility Model letters or Industrial Design letters patent.chanrobles virtual law library
(c) Technology
means the application of knowledge or science which shall include all
others
such an inventions, innovations and results of researches.
(d) Department
refers to the Department of Science and Technology.
(e) Institute
refers to the Technology Application and Promotion Institute. chanrobles virtuallaw libraryred
(f) Patent
Office refers to the Bureau of Patent, Trademark and Technology
Transfer.
(g) RDI's
refer to the Research and Development Institute of the Department of
Science
and Technology.
ARTICLE
II
CASH
REWARDS
Sec.
4. Presidential Awards for Inventions.
— Presidential awards for inventions consisting of Cash Rewards shall
be
granted to patented inventions in the Philippines to be chosen by a
screening
committee with members consisting of technical representatives from the
Department of Science and Technology, the Filipino Inventors Society,
and
the Department of Environment and Natural Resources.cralaw:red
Outstanding
investors shall be divided into four (4) categories with the
corresponding
cash rewards as follows:
(1) Inventions.
(i) First Prize, One hundred thousand pesos (P100,000.00): (ii) Second
prize, Fifty thousand pesos (P50,000.00); and (iii) Third prize, Twenty
thousand pesos (P20,000.00); chanrobles virtuallaw libraryred(2) Utility
Models. (i) First Prize, Fifty thousand pesos (P50,000.00); (ii) Second
prize, Twenty thousand pesos (P20,000.00); and (iii) Third prize, Ten
thousand
pesos (P10,000.00):
(3) Industrial
Design. (i) First Prize, Fifty thousand pesos (P50,000.00); (ii) Second
Prize, Twenty thousand pesos (P20,000.00); and (iii) Third prize, Ten
thousand
pesos (P10,000.00);
(4) Creative
Research, (i) First prize, Twenty thousand pesos (P20,000.00); (ii)
Second
Prize, Ten thousand pesos (P10,000.00); and (iii) Third prize, Five
thousand
pesos (P5,000.00); chanrobles virtuallaw libraryred
A
round-trip ticket fare in addition to necessary and reasonable expenses
but not more than Three Hundred Pesos (P300.00) a day shall be provided
to all provincial awardees. Upon recommendation of the Screening
Committee,
all winners may be sent by the Philippine Government to other countries
where their winning inventions or areas of interest are advanced.
The
Screening Committee may adjust the cash awards and the additional
expenses
aforecited subject to the approval of the Institute.chanrobles virtual law library
ARTICLE
III
TAX
INCENTIVES AND TAX EXEMPTIONS
Sec.
5. Tax Incentives. — Inventors,
as certified by the Filipino Inventors Society and duly confirmed by
the
Screening Committee, shall be exempt from payment of license fees,
permit
fees and other business taxes in the development of their particular
inventions.
This is an exception to the taxing power of the local government units.
The certification shall state that the manufacture of the invention is
made on a commercial scale.cralaw:red
Inventors
shall exempt from paying any fees involved in their application for
registration
of their inventions.
Sec.
6. Tax Exemption. — To promote,
encourage, develop and accelerate commercialization of technologies
developed
by local researchers or adapted locally from foreign sources including
inventions, any income derived from these technologies shall be
exempted
from all kinds of taxes during the first ten (10) years from the date
of
the first sale, subject to the rules and regulations of the Department
of Finance: Provided, that this tax exemption privilege pertaining to
invention
shall be extended to the legal heir or assignee upon the death of the
inventor.chanrobles virtuallaw libraryred
The
technologies, their manufacture or sale, shall also be exempt from
payment
of license, permit fees, customs duties and charges on imports.cralaw:red
ARTICLE
IV
INVENTION
DEVELOPMENT ASSISTANCE FUND
Sec.
7. Inventions Development Assistance
Fund. — There is hereby established an Invention Development Assistance
Fund from the operations of the Technology Application and Promotion
Institute
in the amount of at least twelve percent (12%) of the annual operations
fund of the Institute and from donations, bequests, and other sources,
public, private or domestic or foreign, for assisting potential or
actual
inventors in the initial experiments and prototype development and
other
inventor-development related activities of invention or innovation. The
Fund shall be administered by the Institute and in the performance of
the
advisory board of inventors from the public and private sector. All
donations
to the Assistance Fund shall be tax exempt or tax deductible.cralaw:red
Sec.
8. Expanded Functions of the
Institute. — In order to carry out the Incentives in this Act, the
Institute
shall have the following expanded functions; chanrobles virtuallaw libraryred
(a) Assist
technologies, inventors and researches, avail of the laboratories and
other
facilities of the RDI's including regional offices and other government
agencies, offices and instrumentalities upon recommendation of the
Director
of the Institute: Provided, That the receipt of such assistance agree
to
give to the Institute at least one-tenth (1/10) of all royalties
arising
from the technology or invention depending upon the extent of facility
or services utilized to help maintain the research laboratories; andchanrobles virtuallaw libraryred(b) Accredit
and recognize inventor organization throughout their activities.chanrobles virtual law library ARTICLE
V
INVENTION
GUARANTEE FUND
Sec.
9. Invention Guarantee Fund.
— For the effective implementation of this Act, the Invention Guarantee
Fund (IGF) created by Republic Act No. 3850, as amended, deposited with
the Development Bank of the Philippines, and the interest earnings
thereof,
shall be made available to finance and guarantee the loan assistance of
any patented Filipino invention duly certified by the Filipino
Investors
Society and by the Screening Committee created under Section 4 of this
Act. Appropriations under this Act and interest earnings of the Fund
shall
form part of the Fund to pay for the finance and guarantee of loan
assistance,
cash rewards and other incentives to investors provided under this
Act.chanrobles virtual law library
A
continuing annual appropriation in the amount of not less than Ten
Million
Pesos (P10,000,000.00) shall also be provided for this purpose in the
annual
budget of the Department of Science and Technology. The Fund shall also
be used for special financing programs for Filipino inventions pursuant
under this Act.
Sec.
10. Financial and Loan Assistance
from Government Banks. — Loan assistance for the commercial production
of an invention, either locally or for export and duly certified by the
Filipino Inventors Society and the Screening Committee created under
Section
4, shall be extended by government banks: Provided, That said invention
meets the criteria that would enhance the economy of the country such
as
profitability and viability, dollar-earning capacity, and generation of
employment opportunities for Filipinos: Provided, further, That said
loan
shall be guaranteed by the IGF. chanrobles virtuallaw libraryred
Loans
under this Section of not more than Two Hundred Thousand Pesos
(P200,000.00)
shall be granted without a need of real estate collateral: Provided,
however,
That an assignment of rights to the invention shall be executed in
favor
of the bank or financing institution, subject to other lending terms,
conditions
and availability of loanable funds by the bank.
No
limit to the amount of loan applied for shall be granted to the
inventor
who can provide fifteen per centum (15%) equity of the loan applied
for:
Provided, that acceptable collaterals can be presented to fully secure
his loan.cralaw:red
However,
when there is existing foreign irrevocable letter of credit issued in
favor
of the inventor or the duly registered company producing his invention
for export, all government banks, after verification of the commercial
production and availability of such products covered by the letter of
credit,
shall grant up to eighty per centum (80%) of the peso value of the
foreign
letter of credit: Provided, however, That the inventor of the
manufacturing
company assigns the letter of credit to the bank where the loan is
arranged
and whatever goods that the inventor or his company will produce, or
warehouse
receipts, if any, to show evidence that the goods have been partially
produced.cralaw:red
Sec.
11. Government Agencies Assistance.
— In order to facilitate the granting of loans or financial assistance
by any government bank, all government agencies concerned are required
to extend all possible assistance, such as the use of its facilities in
the preparation of project feasibility studies and evaluations and
products
to be produced by the inventor. chanrobles virtuallaw libraryred
ARTICLE
VI
RULES
AND REGULATIONS, COMMON PROVISIONS
Sec.
12. Rules and Regulations. —
Subject to the approval of the Secretary of the Department, the
Institute,
in consultation with the Filipino Inventors Society, shall promulgate
rules
and regulations necessary to carry out the purposes of this Act.
All
rules and regulations, orders and other issuance, awards to loan
recipients,
and other acts affecting third persons or requiring the award of funds
under this Act, shall take effect after their publication in a national
newspaper of general circulation.chanrobles virtual law library
Sec.
13. Separability Clause. — If
any part or provisions of this Act be held unconstitutional or invalid,
other parts or provisions hereof which are not affected thereby shall
continue
in full force and effect.cralaw:red
Sec.
14. Repealing Clause. — Any law,
decree, rules, or regulations, executive orders or parts thereof
inconsistent
with this Act are hereby repealed or modified accordingly.chanrobles virtuallaw libraryred
Sec.
15. Effectivity. — This Act shall
take effect upon its publication in at least two (2) national
newspapers
of general circulation.
Approved:
April
28, 1992
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