Article 18Supplement v1, p. 18

COMMERCIAL LAWS SUPPLEMENT

of every description, except those prohibited by law,

brought into the zone to be sold, stored, broken up,

repacked, assembled, installed, sorted, cleaned, graded,

or

otherwise

processed,

manipulated,

manufactured,

mixed with foreign or domestic merchandise whether

directly or indirectly related in such activity, shall not be

subject

to

customs

and

internal

revenue

laws

and

regulations nor to local tax ordinances, the provisions of

law to the contrary notwithstanding.

(2)

Merchandise

purchased

by

a

registered

zone

enterprise from the customs territory and subsequently

brought into the zone, shall be considered as export sales

and the exporter thereof shall be entitled to the benefits

allowed by law for such transaction.

(3) Domestic merchandise sent from the zone to the

customs territory shall, whether or not combined with or

made part of other articles likewise of local origin or

manufactured in the Philippines while in the export

processing zone, be subject to internal revenue laws of

the Philippines as domestic goods sold, transferred or

disposed of for local consumption.

(4) Merchandise sent from the export processing zone to

the customs territory shall, whether or not combined with

or made part of other articles while in the zone, be

subject to rules and regulations governing imported

merchandise. The duties and taxes shall be assessed on

the value of imported materials (except when the final

product is exempt) and the internal revenue taxes on the

value added.

(5) Domestic merchandise on which all internal revenue

taxes have been paid, if subject thereto, and foreign

merchandise previously imported on which duty or tax

has been paid, or which have been admitted free of duty

and tax, may be taken into the zone from the customs

territory of the Philippines and be brought back thereto

free of quotas , duty or tax.

(6) Subject to such regulations respecting identity and

safeguarding of the revenue as the Authority may deem

necessary when the identity of an article entered into the

export processing zone under the immediately preceding

paragraph has been lost, such article when removed

from the zone and taken to the customs territory shall be

treated as foreign merchandise entering the country for

the first time, under the provisions of the Tariff and

Customs Code .

(7) Articles produced or manufactured in the zone and

exported therefrom shall, on subsequent importation

into the customs territory, be subject to the import laws

applicable to like articles manufactured in a foreign

country;

(8) Unless the contrary is shown, merchandise taken out

of the zone shall be considered for tax purposes to have

been sent to customs territory.

ARTICLE 78. Additional Incentives . — A zone registered

enterprise shall also enjoy all the incentive benefits

provided in Article 39 hereof under the same terms and

conditions stated therein. In addition, zone registered

enterprises shall also be entitled to the following:

(a)

Exemption

from

Local

Taxes

and

Licenses .

—

Notwithstanding the provisions of law to the contrary,

zone registered enterprises shall, to the extent of their

construction, operation or production inside the zone be

exempt

from

the

payment

of

any

and

all

local

government imposts, fees, licenses or taxes except real

estate

taxes

which

shall

be

collected

by

the

Province/City/Municipality responsible for the collection

thereof under the provisions of the Real Property Tax

Code :

Provided ,

That

machineries

owned

by

zone

registered enterprises which are actually installed and

operated in the Zone for manufacturing, processing or for

industrial purposes shall not be subject to the payment of

real estate taxes for the first three (3) years of operation of

such machineries: Provided , further , That fifty percent

(50%) of the proceeds of the real estate taxes collected

from all real properties located in the Zone and such

other areas owned or administered by the Authority shall

be

remitted

to

the

Authority

by

the

province/city/municipality responsible for the collection of

such taxes under the provisions of the Real Property Tax

Code . All real estate taxes accruing to the Authority as

herein provided shall be expended for such community

facilities, utilities and/or services as the Authority may

determine.

(b) Production equipment or machineries, not attached

to real estate, used directly or indirectly, in the production,

assembly or manufacture of the registered product of the

zone registered enterprise shall be exempt from real

property taxes.

Final Provisions

ARTICLE 79. Interpretation . — All doubts concerning the

benefits and incentives granted enterprises and investors

by this Code shall be resolved in favor of investors and

registered enterprises.

ARTICLE

80.

Vested

Rights .

—

Existing

registered

enterprises which are enjoying the incentives under the

laws repealed by Books One and Six of this Code shall

continue to enjoy such incentives for the period therein

stated:

Provided,

however,

That

firms

which

made

investments in new or expansion projects approved or

registered by the Board or the Authority on or after

December 1, 1986 but before the effectivity of this Code

may opt to be governed by the provisions of this Code.

ARTICLE

81.

Confidentiality

of

Applications .

—

All

applications and their supporting documents filed under

this Code shall be confidential and shall not be disclosed

to any person, except with the consent of the applicant or

on orders of a court of competent jurisdiction.

ARTICLE 82. Judicial Relief. — All orders or decisions of

the Board in cases involving the provisions of this Code

shall immediately be executory. No appeal from the order

or decision of the Board by the party adversely affected

shall stay such order or decision: Provided , That all

appeals shall be filed directly with the Supreme Court

within thirty (30) days from receipt of the order or

decision.

ARTICLE

83.

Effectivity

of

Implementing

Rules

and

Regulations . — The Board shall promulgate rules and

regulations to implement the intent and provisions of this

Code and shall have the authority to impose such fines in

amounts that are just and reasonable in cases of late

submission or non-compliance on the part of registered

enterprises, with reporting and other requirements under

this Code and its implementing rules and regulations.

Such rules and regulations shall take effect fifteen (15)

days following its publication in newspaper of general

circulation in the Philippines.

ARTICLE 84. Separability Clause . — The provisions of this

Code are hereby declared to be separable and, in the

event any such provisions is declared unconstitutional,

the other provisions which are not affected thereby shall

remain in force and effect.

ARTICLE 85. Repealing Clause . — The following provisions

or laws are hereby repealed:

1) Batas Pambansa 44

2) Batas Pambansa 391 (1983)

3) Presidential Decree 218

4) Presidential Decree 1419

5) Presidential Decree 1623 , as amended

6) Presidential Decree No. 1789 (1981)

7) Presidential Decree 2032

8) Executive Order 815

9) Executive Order 1045 (1985)

All other laws, decrees, executive orders, administrative

orders, rules and regulations or parts thereof which are

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