Incentives Available to a Registered Tourism Enterprise.
Section 8
SEC. 8. Incentives Available to a Registered Tourism Enterprise. — Fifty percent (50%) of foreign exchange earned in the first five years from the start of operations shall be deductible from net taxable income, subject to other provisions of Section 10 of Republic Act No. 6135 and rules and regulations to be promulgated by the Authority. A net operating loss incurred in any of the first ten years of operation shall be carried over as a deduction from taxable income for six years following such loss as provided for in Section 7(c) of Republic Act No. 5186. A tax credit shall be granted for taxes withheld on interest payments on foreign loans as provided for in Section 7(f) of Republic Act No. 5186 and denned under Section 3 thereof. Exemption from real estate taxes on land improvements and buildings shall be granted for the first five years from the start of operations. Importations of machinery and equipment, and spare parts shipped with such equipment shall not be subject to tariff duties and compensating tax within seven years from the date of registration with the Authority subject to the other provisions in Section 7(d) of Republic Act No. 5186. A tax credit equivalent to one hundred percent of the value of the compensating tax and customs duties that would have been paid on machinery and spare parts had these items been imported shall be given to the registered tourism enterprise who purchases machinery, equipments and spare parts from a domestic manufacturer, and another tax credit equivalent to fifty percent thereof shall be given to the said manufacturer subject to other provisions in Section 7(e) of Republic Act No. 5186, and denned under Section 3(j) thereof. Undistributed profit or surplus which a registered tourism enterprise reinvests shall be allowed as a deduction from its taxable income in the year such reinvestments were made, subject to other provisions of Section 7(h) of Republic Act No. 5186, to the extent of: 50% for expansion of registered tourism facilities within the Greater Manila Area; 75% for expansion of registered tourism facilities outside of Greater Manila; 75% for the expansion of existing registered tourism facilities in Greater Manila to additional facilities outside of Greater Manila.