Incentives for Regional Headquarters (RHQ) and Regional Operating Headquarters (ROHQ) in the Philippines

RHQ are entitled to the following incentives:

  1. Exemption on the Payment of Corporate Income Tax. An annual information return of a tax-exempt corporation shall be filed with the Bureau of Internal Revenue (BIR) to effect exemption.
  2. Exemption on the Payment of Value-Added Tax. The exemption includes the sale or lease of goods and property including the rendition of services to RHQ.

ROHQ can avail of the following incentives:

  1. Payment of Corporate Income Tax. Income derived by the ROHQ from performing qualifying activities shall be subject to a preferential rate of 10% on taxable income.
  2. Payment of Branch Profit Remittance Tax. Any income derived from the Philippines when remitted to the parent company shall be subject to the tax on branch profit remittances.
  3. On the Payment of Value-Added Tax. ROHQ shall be subject to the ten percent (10%) value-added tax unless otherwise provided under the National Internal Revenue Code.

Exemptions common for both RHQ and ROHQ:

  1. Exemption on the Payment of All Kinds of Local Taxes, Fees, or Charges. Payment however, shall be made for real property tax on land improvements and equipment.
  2. Tax and Duty Free Importation of Training Materials and Equipment. Applicable to materials not locally available, subject to prior approval from the Board of Investments (BOI).

The sale or disposition of equipment within two years after importation, entered tax and duty free, shall require prior approval from the BOI and prior payment of applicable taxes and duties.

  1. Entitlement to the Importation of New Motor Vehicles. The importation shall be subjected to the payment of the corresponding taxes and duties.

Under RA 8756, the following incentives are given to the expatriates of a registered RHQ/ROHQ in the Philippines:

  1. Multiple Entry Visa. Issued to the expatriates, their respective spouses and unmarried children under 21 years old. A non-immigrant visa shall be issued within 72 hours upon submission of all required documents.

The multiple entry visa is be valid for a period of three (3) years and extendible for another three years upon submission to the Bureau of Immigration of a sworn certification by a responsible officer of the RHQ/ROHQ that its license to operate remains valid and that it complied with all requirements stipulated under relevant Philippine laws.

  1. Withholding Tax of 15% on Compensation Income. Applied to both alien and Filipino executives holding managerial or technical positions.
  2. Tax and Duty Free Importation of Personal and Household Effects. Applicable on imports made within ninety (90) days before or after conversion of the alien executive’s admission category to multiple entry visa.
  3. Travel Tax Exemption. Issued by the Philippine Tourism Authority (PTA) upon recommendation by the BOI during the period of the expatriate’s assignment in the country.