Section 10
SEC. 10. Incentives to registered service exporters.-Every registered service exporter shall, for the first five years from registration, be entitled to deduct from its taxable income an amount equivalent to fifty percent (50%) of the increment of its total export fees during the year in which the incentive is claimed over seventy-five per cent (75%) of its total export fees in 1969; and thereafter, and until the tenth year after registration, to a similar deduction based on the increment of annual total export fees over its average annual total export fees during the preceding five years: Provided, That, to be entitled to this deduction, the registered service exporter must have remitted or repatriated to the Philippines its total export fees earned during the year in which the incentive is claimed, less reasonable costs and expenses incurred or payable in foreign currencies, under such rules and regulations as the Monetary Board may prescribe. In addition, for a period of ten years from registration, a registered service exporter who produces television or notion pictures, or musical recordings, in the Philippines, and exports the picture or recording directly or through a registered export trader shall also be entitled (a) to a tax credit equivalent to the amount of specific, compensating and sales taxes and duties paid by it on the raw materials and supplies used in producing the picture or recording that is exported; and (b) to exemption from payment of customs duties and compensating taxes on importations of equipment, machinery or spare parts shipped with such machinery and equipment that (1) are not manufactured domestically in reasonable quantity and quality or sold at reasonable prices; (2) are directly and actually needed and will be used by the registered service exporter in producing or making the pictures or recordings that it exports; (3) are covered by shipping documents in the name of the registered service porter to whom the shipment will be delivered direct customs authorities; (4) have the approval of the Board of Investments obtained by the registered service exporter before placing the order for the importation; (5) are the subject of international bidding, under supervision of the Board, unless the Board dispenses p this condition for any of the reasons set forth in Section 7, paragraph (c) of this Act. If the registered eservice exporter does not bring into the Philippines export fees equivalent to at least the cost of the imported machinery, equipment and spare parts within five (5) years after delivery of the same to it, or if it sells, or disposes of the same or any part thereof, without prior approval of the Board, within said (5) years, it shall pay twice the amount of the exemption given it, together with the penalty and interest there computed from the date of delivery, fixed by the Tariff and Customs Code and the National Internal Revenue Code for delinquency in the payment of duties and taxes. However, the Board shall allow and approve the sale transfer or disposition within the said period of five (5) years, if the registered service exporter has brought into the Philippines export fees during the period it has held the equipment which amount to twenty per cent (20%) of the cost of the equipment for each year in which it has held the equipment; and if made (1) t another registered service exporter of pictures and recordings; (2) for reasons of proven technical obsolescence; or (3) for purposes of replacement to improve or expand the operations of the registered service exporter.