EXECUTIVE ORDER NO' 313

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EXECUTIVE ORDER NO. 313 Modifying the Rates of
Duty on Capital Equipment, Spare Parts and
Accessories Imported by BOI-Registered New and
Expanding Enterprises
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EFFECTIVITY OF THE E.O.
Two (2) Year Period 6 June 2004 6 June 2006
3

• OBJECTIVES OF THE E.O.

• To reduce the cost of imported equipment needed
  by BOI registered enterprises
• To encourage investments in preferred areas of
  activity
• To make the Philippines more attractive to
  investors

4

• QUALIFIED ENTERPRISES

• Enterprises with new projects
• Enterprises with expansion projects (includes
  modernization and rehabilitation)
• Enterprise must be registered with the Board of
  Investments on or after 6 June 2004

5

• ALLOWABLE ITEMS TO BE IMPORTED

• Machinery/Capital Equipment
• Spare Parts
• Accessories
• Only those classified under Chapters 40, 59,
  68-70, 73, 76, 82-85, 87, 89, 90-91, and 96 of
  the Tariff and Customs Code of the Philippines
• Exceptions Those covered under the Motor Vehicle
  Development Program (MVDP)

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• RATE OF DUTY

• Zero Percent (0.0) for export-oriented
  enterprises
• One Percent (1.0) for domestic-oriented
  enterprises

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• CONDITIONS

• Items are not manufactured domestically in
  sufficient quantity, of comparable quality and at
  reasonable prices
• Items are reasonably needed and will be used
  exclusively in the registered activity
• Rated capacity of equipment/machinery is within
  the registered capacity of the enterprise
• Prior Board approval was obtained before making
  Purchase Order or opening Letter of Credit

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DOCUMENTARY REQUIREMENTS

• Accomplished and notarized application forms (2
  sets)
• List of items to be imported (with diskette
  containing soft copy for long listings or long
  descriptions)
• Computation of estimated costs, taxes and duties
• Pro-forma invoice or price quotation and brochure
  or technical literature

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DOCUMENTARY REQUIREMENTS (Contn)

• Proofs that items to be imported are not
  manufactured locally
• Justification for acquisition of equipment if
  they were not listed in the Final Evaluation
  Report
• Certification of compliance with BOI Terms and
  Conditions

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• WHERE TO FILE APPLICATIONS

• BOI Head Office, Makati City
• BOI Cebu Extension Office
• BOI Davao Extension Office
• BOI Cagayan de Oro Extension Office

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PROCESS FLOW

• Checklisting of application by the Incentives
  Department
• Payment of filing fee of P1,500 per application
• Official acceptance of application by Records
  Section
• Evaluation of application by ID technical staff
• Review of Evaluation Report by Division Chief and
  Director

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PROCESS FLOW (contn)

• Review of Evaluation Report by the Executive
  Director and signing of the Certificate of
  Authority (for straightforward applications)
• For non-straight forward applications, the
  Evaluation Report will be presented first to
  Mancom and Board for decision before the
  Executive Director signs the CA
• Release of the CA to the applicant

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• PROCESSING TIME

• For straightforward applications
• Checklisting and pre-evaluation (1st working
  day)
• Evaluation of application (2nd to 5th working
  day)
• Preparation, signing and release of of CA (6th
  working day)

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• PROCESSING TIME

• For non-straightforward applications
• Checklisting and pre-evaluation (1st working
  day)
• Evaluation of application (2nd to 5th working
  day)
• Mancom and Board approval (6th to 9th working
  day)
• Preparation, signing and release of of CA (10th
  working day)

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REQUIREMENTS FOR RELEASE OF CA

• Posting of Performance Bond with a Government
  Bonding company (e.g.,GSIS)
• Payment of issuance fee of ½ of 1 of duties
  waived, but not less than P300 and not more than
  P15,000

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VALIDITY OF THE CA

• Six (6) months from date of issuance
• Extension of another six (6) months in
  meritorious cases
• Surrender of the CA to BOI within fifteen (15)
  days from its expiration if it is 100 unutilized

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PERFORMANCE BOND

• Should be equivalent to the duties waived
• Is posted to ensure enterprise will meet its
  export, production or revenue commitment,
  whichever is applicable
• Shall be forfeited if registered enterprise
  failed to meet its commitment
• May be lifted by the Board in meritorious cases

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RELEASE OF SHIPMENT

• Submit to the Department of Finance official
  import documents for a DOF endorsement
• File an Import Entry Declaration with the Bureau
  of Customs, supported by the ff
• Commercial Invoice
• Bill of Lading
• BOI Certificate of Authority
• such other documents required by the BOC

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MONITORING

• After shipment has been released from Customs
• Enterprise submits copies of Import Entry and
  Internal Revenue Declaration and other pertinent
  documents to the BOI
• Enterprise informs the BOI of the installation
  date of the equipment
• BOI checks if the machinery and equipment were
  actually installed and are used in the registered
  operation

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• SALE OR DISPOSITION OF EQUIPMENT

• Shall be subject to Board approval if made within
  five (5) years from acquisition
• Such approval is granted if made
• to another qualified registered enterprise
• for reasons of technical obsolescence
• for purposes of replacement to improve/expand
  operations
• Payment of twice the duties waived if Board
  approval was not sought

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Thank You.