Section 16Sec./Art. 16

Section 293 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:

"Section 293. Definitions. - When used in this Title:

(A) Capital equipment refers to machinery, equipment, major components thereof, tools, devices, applications, or apparatus, which are directly attributable to be registered project or activity of the registered business enterprise;

(B) Certificate of authority to import refers to the document issue by the Investment Promotion Agency as proof of entitlement to exemption from value-added tax and/or duty-free importation which shall contain a list of capital equipment, raw materials, spare parts, or accessories to be imported that are directly attributable to the production of goods and services, including goods used for administrative purposes;

(C) Certificate of registration refers to the document evidencing registration with an Investment Promotion Agency and entitlement to tax incentives: Provided, That each registered project or activity of a registered business enterprise should be supported by a separate certificate of registration;

(D) Directly attributable refers to goods and services that are incidental to and reasonably necessary for the registered project or activity of the registered business enterprise, including janitorial, security, financial, consultancy, marketing and promotion services, and services rendered for administrative operations such as human resources, legal, and accounting: Provided, That t he determination of what is 'directly attributable' to the registered project or activity of the registered business enterprise shall be made by the relevant Investment Promotion Agency;

(E) Direct local employment x x x

(F) Domestic input x x x

(G) Domestic market enterprise x x x

(H) Export enterprise x x x

(I) Freeport zones refer to isolated and policed areas adjacent to a port of entry, which shall be operated and managed as a separate customs territory for purposes of ensuring free flow or movement of goods between registered business enterprises, except those expressly prohibited by law, within, into, and exported out of the freeport zone where imported goods may be unloaded for immediate transshipment or stored, repacked, sorted, mixed, or otherwise manipulated subject to the provisions of Section 294(D) and (E) and 295(C) and (D): Provided, That a freeport shall have a permanent customs control or customs office at its perimeter;

(J) High-value domestic market enterprises refer to registered domestic market enterprises with an investment capital exceeding Fifteen billion pesos (Php15,000,000,000) and are engaged in sectors considered import-substituting, or with export sales in the immediately preceding year of at least One hundred million US dollars (USD100,000,000) or its equivalent in an acceptable foreign currency: Provided, That t he threshold specified herein may be increased by the Fiscal Incentives Review Board;

(K) Investment capital refers to the value of investment indicated in Philippine currency, that shall be used to carry out a registered project or activity such as pre-operating expenses, cost of land and land improvements, buildings, leasehold equipment, inventory, and other current and non-current assets;

(L) Investment Promotion Agencies refer to government entities created by law, executive order, decree, or other issuances, in charge of promoting investments, granting and administering tax and non-tax incentives, and overseeing the operations of the different economic zones and freeports in accordance with their respective special laws.

These include the Board of Investments (BOI), Bangsamoro Board of Investments (BBOI), Bangsamoro Economic Zone Authority (BEZA), Philippine Economic Zone Authority (PEZA), Bases Conversion and Development Authority (BCDA), Subic Bay Metropolitan Authority (SBMA), Clark Development Corporation (CDC), John Hay Management Corporation (JHMC), Poro Point Management Corporation (PPMC), Cagayan Special Economic Zone Authority (CEZA), Zamboanga City Special Economic Zone and Freeport Authority (ZCSEZA), PHIVIDEC Industrial Authority (PIA), Aurora Pacific Economic Zone Authority (APECO), Authority of the Freeport Area of Bataan (AFAB), Tourism Infrastructure and Enterprise Zone Authority (TIEZA), Bulacan Special Economic Zone and Freeport Authority (BEZA), and all other similar existing authorities or those that may be created by law unless otherwise specifically exempted from the coverage of this Code.

(M) Metropolitan areas x x x

(N) Net book value refers to historical cost less accumulated depreciation, as reflected in the books of account or financial statements of the registered business enterprise, and determined in accordance with accepted accounting standards:

(O) Other government agencies administering tax incentives x x x

(P) Other registered entities x x x

(Q) Qualified capital expenditure x x x

(R) Registered business enterprise (RBE) x x x

(S) Research and development x x x

(T) Sophisticated x x x

(U) Sophistication x x x

(V) Source document x x x

(W) Special economic zone or ecozone refers to a selected area which shall be operated and managed as a separate customs territory that is highly developed or has the potential to be developed into an agro-industrial, industrial, information technology, or tourist/recreational area, whose metes and bounds are fixed or delimited by presidential proclamations and is within a specific geographical area which includes industrial estates (IEs), export processing zones (EPZs), ICT parks and centers, and free trade zones: Provided, That for the ecozone to qualify as a separate customs territory, an ecozone shall have a permanent customs control or customs office at its perimeter: Provided, however, That areas where mining extraction is undertaken shall not be declared as an ecozone: Provided, further, That vertical economic zones, such as, but not limited to, buildings, selected floors within buildings, and selected areas on a floor, need to comply with the minimum contiguous land area as determined by the Fiscal Incentives Review Board;

(X) Technical obsolescence refers to the state of an asset when its design or specification no longer fulfills the function for which it was originally designed and/or the machinery, equipment, spare parts and/or materials have diminished in value as caused by changes in technology and new inventions, rendering it less desirable in the industry, including a decline in value due to the availability of improved, more cost-effective alternatives, or due to the availability of more advanced technology that allows for more efficiency such as earlier replacement of information technology assets, as may be verified and approved by the Investment Promotion Agency; and

(Y) Training x x x."