REPUBLIC OF THE PHILIPPINES

TOURISM INFRASTRUCTURE AND ENTERPRISE ZONE AUTHORITY

GUIDELINES FOR THE DESIGNATION AND SUPERVISION OF TOURISM
ENTERPRISE ZONES AND THE ADMINISTRATION OF INCENTIVES
UNDER R.A. 9593
BOOK ONE
GENERAL PROVISIONS
Rule I.
Definition and Basic Guidelines
SECTION 1. Title. These rules shall be referred to as the GUIDELINES FOR THE
DESIGNATION AND SUPERVISION OF TOURISM ENTERPRISE ZONES AND THE
ADMINISTRATION OF INCENTIVES UNDER R.A. 9593.
SECTION 2. Definition of Terms. For purposes of these Implementing Guidelines, the
following definitions shall apply :
a. Act shall refer to Republic Act No. 9593, otherwise known as the Tourism
Act of 2009.
b. Board shall refer to the Board of Directors of Tourism Infrastructure and
Enterprise Zone Authority (TIEZA).
c. Brownfield Tourism Zone shall refer to an area with existing infrastructure
or tourism related development as determined by TIEZA.
d. Carrying Capacity refers to the number of individuals who can be
supported in a given area within natural resource limits, and without
degrading the natural, social, cultural and economic environment for present
and future generations. The carrying capacity shall be computed based on an
acceptable model/method of establishing the maximum number of people or
tourism development in any given space at a given time.
e. Capital Investment shall refer to the money used to purchase a capital asset
or equipment.

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f. Certificate of Designation shall refer to the certificate issued by TIEZA

upon approval of the application for the designation of an area as a Tourism
Enterprise Zone (TEZ).
g. Certificate of Entitlement shall refer to the certificate issued by TIEZA to
TEZ operators and/or registered tourism enterprises as proof of their
entitlement to incentives provided under the Act.
h. Certificate of Registration shall refer to the certificate issued by TIEZA to an
enterprise upon its registration.
i.

Contiguous Territory shall refer to a territory so closely united and so

nearly adjacent to each other, even if separated by bodies of water, that they
meet at a certain point.

j.

Date of Registration shall refer to the date appearing in the certificate of

registration.

k. Department shall refer to the Department of Tourism as reorganized

pursuant to the Act.
l.

Fixed Assets shall refer to those assets subject to depreciation under the
National Internal Revenue Code (NIRC).

m. Greenfield Tourism Zone shall refer to an area with minimal or no existing

infrastructure and tourism related development as determined by TIEZA.
n. Gross Income shall refer to gross sales or gross revenues derived from
business activity, net of sales discounts, sales return and allowances and
minus costs of sales or direct costs but before any deduction is made for
administrative expenses or incidental losses during a given taxable period as
provided in the NIRC, as amended and other pertinent revenue regulations.
o. Goods unless otherwise specified in these Rules shall refer to merchandise
used by a registered enterprise in the normal operation of its business within
the TEZ.
p. Original Investment as used in these rules shall refer to the fair market
value of the physical assets, exclusive of land acquisition costs, at the time of
filing of application for the availment of incentives for existing enterprises.
q. Registered Enterprise shall refer to an enterprise duly registered with the
TIEZA.
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r. SEC shall refer to the Securities and Exchange Commission.

s.

Spare Parts shall refer to usual components of machinery and / or

equipment which are subject to wear and tear arising from normal use,
utilization and operation.

t. Start of Business Operations shall refer to the date specified in the

application for registration or the date when the particular TEZ or registered
tourism enterprise actually begins operation, whichever comes first, but not
earlier than the date of registration, regardless of phases or modules or
schedule of development.
u. Substantial Expansion shall refer to the expansion or upgrade of physical
assets amounting to at least 50% of the original investment of the Tourism
Enterprise.
v. Sustainable Tourism Development is the management of all resources that
meet the needs of tourists and host regions while protecting the
opportunities for the future, in such a way that economic, social and aesthetic
needs can be fulfilled while maintaining cultural integrity, essential
ecological processes, biological diversity and life support systems.
w. TEZ Operator shall refer to an entity duly incorporated under Batas
Pambansa Bilang 68, otherwise known as the Corporation Code of the
Philippines, and other relevant laws, whose capital may be provided by the
LGUs and/or private entities, and which shall administer and supervise each
TEZ.
x. TEZ Administrator shall refer to a person appointed by the Board of
Directors of a TEZ Operator who shall be responsible for implementing the
policies, plans and projects of the TEZ Operator.
y. TIEZA shall refer to the Tourism Infrastructure and Enterprise Zone
Authority.
z. Tourists shall refer to people who travel to and stay in places outside their
usual environment for more than twenty-four (24) hours and not more than one
(1) consecutive year for leisure, business and other purposes not related to the
exercise of an activity remunerated from within the place visited.
aa. Tourism Enterprises shall refer to facilities, services and attractions
primarily engaged in whole or in part in tourism and for the purpose of
attracting visitors to and within the Philippines such as, but not limited to,
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facilities, services and attractions involved in tourism; travel and tour services,
tourist transport services, whether for land, sea or air transportation; tour
guides; adventure sports services involving such sports as mountaineering,
spelunking, scuba diving and other sports activities of significant tourism
potential; convention organizers; accommodation establishments, including but
not limited to, hotels, resorts, apartment hotels or apartelles, condotels (that
cater to tourists), tourist inns, motels, pension houses, and home stay operators;
tourism estate management services, restaurants, shops, and department stores,
sports and recreational centers, spas, facilities offering health and wellness
services, museums and galleries, theme parks, convention centers, zoos, and
such other enterprises as may be identified by the Department or the Board.
bb. Tourism Enterprise Zone (TEZ) shall refer to tourism enterprise zones
created pursuant to Chapter IV-A, Section 59 of the Act.

BOOK TWO
TOURISM ENTERPRISE ZONES
Rule II.
Establishment and Designation of Tourism Enterprise Zones
SECTION 1. Jurisdiction. The TIEZA shall have sole and exclusive jurisdiction in the
establishment and designation of a TEZ which shall not be impliedly repealed or
modified. All permits and licenses shall be issued by TIEZA to TEZ Operators and
Registered Tourism Enterprises .
SECTION 2. Criteria. Any geographic area where a Tourism Enterprise Zone may be
established shall conform with the following criteria to ensure that TEZs will not
proliferate in a manner that diminishes their strategic economic and developmental
value to the national economy:
a.)

The area is capable of being defined into one contiguous territory;

b.)

It has historical and cultural significance, environmental beauty, or

existing or potential integrated leisure facilities within its bounds or
within reasonable distances from it;

c.)

It has, or it may have, strategic access through transportation

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infrastructure, and reasonable connection with utilities infrastructure

systems;
d.)

It must be at least five (5) hectares and sufficient in size, such that it
may be further utilized for bringing in new investments in tourism
establishments and services. Provided that, in extremely meritorious
cases, an area less than five (5) hectares may be developed as a TEZ if
the Board deems it sufficient for the purposes, requirements and
nature of the tourism project to be undertaken therein;

e.)

It is in a strategic location such as to stimulate the sustainable socioeconomic development of neighboring communities.

f.)

The area must be situated where controls can easily be established to

curtail illegal activities.

The dispersal of economic activities in the least developed areas in the

countryside is encouraged. An area in any of the least developed areas
identified in the annual Investment Priorities Plan (IPP) shall be given priority
in the designation as a Tourism Enterprise Zone.
SECTION 3. Classification of TEZs. Based on the particular purpose stated in the
applicants development plan, the TEZs to be created shall be classified as follows:
a.)

Cultural Heritage Tourism Zone areas that will allow the tourist to
experience the places, artifacts and activities that authentically
represent the stories of the people living in the area, past or present.
The area may include, but will not be limited to:
1.
2.
3.
4.
5.
6.
7.

Cultural landscapes;
Historic sites, areas and precincts;
Ruins, archaeological and maritime sites;
Sites associated with industrial, scientific and agricultural
heritage;
Collections that house or collectively promote objects of
heritage significance;
Historic places and areas, including villages, small towns,
cities and parts of larger urban areas with significant
cultural and heritage assets; and
Museums, Art Galleries, Cultural Centers, Arts & Crafts
Shops, and Antique Shops, and Cultural Sites.

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b.)

Health and Wellness Tourism Zone areas that will allow visitors to
avail of quality but affordable mainstream, traditional, or alternative
healthcare services for treatment of illnesses and health problems in
order to maintain ones health and well-being.
The area may include, but will not be limited to enterprises that are,
or offer:
1.
2.
3.
4.
5.

c.)

Medical and Allied Services;

Spas;
Health Farms;
Counselling and Rehabilitation Services; and
Traditional Filipino Touch Therapy.

Eco-Tourism Zone - areas that will allow visitors to experience a form

of sustainable tourism within a given natural and/or cultural area
where community participation, conservation and management of
biodiversity, respect for culture and indigenous knowledge systems
and practices, environmental education and ethics as well as
economic benefits are fostered and pursued for the enrichment of
host communities and satisfaction of visitors.
The area may include, but will not be limited to:
1. Sites of scenic natural or rural beauty;
2. Areas for observing wildlife;
3. Areas for low impact activities such as camping, trekking,
climbing, spelunking, diving, surfing, and other similar
activities; and
4. Sites for observing and interacting with traditional or
indigenous practices in relation to the environment.

d.)

General Leisure Tourism Zone areas that may offer recreational

facilities that will have high visitor density.
The area may include, but will not be limited to:
1.
Golf Parks/Resorts;
2.
Theme Parks and Amusement Centers;
3.
Convention and Meeting Centers;
4.
Sports Complexes/Resorts;
5.
Event Centers/Resorts;
6.
Department Stores/Restaurants/Shops; and;
7.
Zoos.

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e.)

Mixed Use Tourism Zone areas that will allow a combination of

some or all of the features of the aforementioned zones within one
area.

Retirement communities and facilities duly accredited by the Philippine

Retirement Authority may be located in General Leisure Tourism Zones,
Health and Wellness Tourism Zones and Mixed-used Tourism Zones.
SECTION 4. Investment Requirement. The minimum amount of investment required
to be entitled to incentives provided under the Act shall not be less than Five Million
US Dollars (US $5,000,000.00) exclusive of land acquisition costs. Provided that, in
extremely meritorious cases, an amount less than Five Million US Dollars (US
$5,000,000.00) may be invested for a Cultural Heritage Tourism Zone or an EcoTourism Zone if the Board deems it sufficient for the purposes, requirements and
nature of the tourism project to be undertaken therein.

SECTION 5. Qualification of Applicants. Any entity duly incorporated under the

Corporation Code and other relevant laws, or any LGU or any other instrumentality
of government in the pursuit of their mandate may qualify as an applicant for the
designation of an area as a TEZ.
SECTION 6. Documentary Requirements for Designation of TEZ:
I.

Upon Application:
a.) Duly accomplished TIEZA Application Form;
b.) SEC Registration Certificate, copies of the articles of incorporation
and by-laws; in case of a joint venture, a copy of the joint venture
agreement;
c.) Company Profile, containing basic data/ information on its technical,
financial, marketing and management capability/ competence to
undertake the proposed project;
d.) Resolution of the applicant's board of directors authorizing the filing
of the application and the designation of their authorized
representative to TIEZA; list of its directors, principal officers, and
major stockholders, including their respective bio-data.

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In the case of an instrumentality of the national government acting in

pursuit of its mandate and/or a local government unit an authority
from the Head of Agency or Local Chief Executive authorizing the
filing of the application and the designation of their authorized
representative to TIEZA;
e.) Vicinity Map reflecting various land uses, important verifiable
landmarks within the five (5) kilometers radius of the project site,
proximity to transportation and utilities infrastructure, and tourism
focal points in the vicinity and their distances from the project site;
f.) Proof of land ownership and/ or Long-Term Lease Agreement(s) for a
period of not less than twenty five (25) years on the entire area of the
proposed TEZ ;
g.) Endorsement letter from the National Historical Institute (NHI) in the
case of Cultural and Heritage Tourism Zone, from the Department of
Health (DOH) in the case of Health and Wellness Tourism Zone; or
from Philippine Retirement Authority (PRA) in the case of retirement
villages/communities; and
h.) Other supporting documents/ papers/ clearances as may be required
by the TIEZA depending upon the nature of the business and the type
of business organization of the applicant.
II.

Prior to Designation
a.) Resolution of the concerned LGU approving the development plan;
b.) Copy of the approved Comprehensive Land Use Plan of the concerned
LGU;
c.) Verified survey returns and technical description of the land area for
the proposed TEZ;
d.) Environmental Compliance Certificate issued by the Department of
Environment and Natural Resources (DENR);
e.) Clearance/Permit from the concerned Protected Area Management
Board if the proposed zone is within a Protected Area;

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f.) Financial statement for (3) years for existing companies;

g.) Development Plan of the area which shall identify and include the
following:
1. Tourism focal points and resources available within the proposed
TEZ and adjoining areas;
2. Features which satisfy the requisites for the designation of a TEZ
enumerated under Section 2, Rule II of these Rules;
3. Amount to be invested by the applicant in the area;
4. Areas for infrastructure development and the kind of development,
for investment and the nature of investment, and for preservation
and the sustainable activities allowed within preserved areas;
5. Public utilities to be operated within the TEZ;
6. Medium and long-term studies on market trends, and corresponding
development strategies for the TEZ;
7. Studies on the economic impact of development within the TEZ and
in surrounding communities;
8. Studies on the carrying capacity of the TEZ and surrounding
communities;
9. Design plans for structures incorporating therein measures that
should ensure the sustainable development of the area and the
surrounding environment, to include the following: the civil and
architectural plans that preferably incorporates Philippine design
elements and cultural heritage, structural plans, electrical,
mechanical, sanitation and design computations, cost estimates and
specifications, financial schedules and construction timetable;
10. Energy efficiency and climate change mitigation measures to be
adopted and implemented in the area; and
11. Compliance statement on Development Standards. TIEZA shall in
coordination with the Department formulate and enforce
development standards for the operation and maintenance of all
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facilities and structures to be built on all Tourism Zones. The

development standards to be formulated and enforced shall be used
as basis for the accreditation of tourism enterprises seeking to avail
of the incentives under the Act. Such standards shall prescribe the
minimum and progressive levels of operating quality and efficiency
consistent with local and international standards, such as but not
limited to the following:
a.) Infrastructure Requirements;
b.) Setback Requirements;
c.) Consumption of natural resources;
d.) Sewerage Disposal System;
e.) Surface Water Disposal;
f.) Safety and security;
g.) Site Coverage Density;
h.) Landscaping;
i.) Visual Security;
j.) Roads;
k.) Vehicle Parking;
l.) Waste Water Treatment; and
m.) Ventilation Requirements.
h.) Other requirements as may be prescribed by the TIEZA Board.
SECTION 7. Filing of Application. The application for designation of a TEZ shall be
filed with the TIEZA upon payment of the corresponding non-refundable filing fee.
SECTION 8. Incomplete Papers. Within fifteen (15) days from receipt of the
application, TIEZA shall notify the applicant of all pertinent requirements not
complied with. The applicant shall have thirty (30) days from receipt of such notice
to comply with the said requirements. Only upon compliance will the application be
recorded/ processed. In this case, the date of compliance shall be deemed the date
of filing.
Failure to comply within the said period shall be construed as an abandonment of
the application, unless upon written request, an extension is granted by TIEZA.
SECTION 9. Publication of Application. Applications for designation of a TEZ will be
subject to publication requirement and payment of publication fee.
SECTION 10. Evaluation and Approval. Upon submission of all the requirements
stated in Section 7 hereof, the TIEZA shall evaluate the application for TEZ
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designation, and if found viable, the TIEZA COO shall recommend to the Board its
approval, subject to other conditions it may reasonably impose.
Any deviation or modification from the approved development plan shall require
the prior authorization of TIEZA. Any unauthorized deviation or modification may
subject the operator to the penalties provided for in Rule XVI of these Rules.
SECTION 11. Certificate of Designation. All TEZs designated under these Rules shall
be issued a certificate under the seal of the Tourism Infrastructure and Enterprise
Zone Authority and the signature of its Chief Operating Officer or any other officer of
the TIEZA as it may empower and designate for the purpose.
The certificate shall be in such form and style as the TIEZA may determine and shall
state, among other things:
a. The name of the designated TEZ;
b. The preferred area of investment in which the TEZ is proposing to develop;
and
c. The other terms and conditions to be observed by the TEZ by virtue of the
designation.

SECTION 12. Timetable of Development. Unless a different period is required and

duly approved by the Board, the development of the whole TEZ must be completed
within a maximum period of five (5) years. The phasing development of the area
may be allowed in the following manner unless otherwise provided by the Board:
a. Phase I
30% of the area
b. Phase II
30% of the area
c. Phase III 20% of the area
d. Phase IV 10% of the area
e. Phase V
10% of the area
At the end of each phase, TEZ operator must provide the basic infrastructure
facilities and utilities ready for immediate use and occupancy by prospective
investor enterprises. Failure to develop and/ or complete within the approved
period, unless extended by the Board for good cause, shall subject the TEZ Operator
to the appropriate penalties provided for under Rule XIV of these Rules. Areas that
are not developed and completed within the approved period shall be restored to
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their original land use at the expense of the TEZ Operator, unless the Board provides
otherwise.
SECTION 13. Finality of Decision on Designation. The decision of the TIEZA Board in
designating a particular area as a TEZ is final and non-appealable.

Rule III.
TEZ Administration
SECTION 1. TEZ Operator. An entity duly incorporated under Batas Pambansa Blg.
68, otherwise known as The Corporation Code of the Philippines, and other
relevant laws, unless the TEZ Operator is an LGU or any other instrumentalities of
the government in the pursuit of their mandate, where capital maybe provided by
the LGUs and/ or jointly with private entities may qualify as a TEZ operator.
There shall be no restrictions on the extent of foreign ownership, except as provided
for under the Constitution and the Foreign Investment Act (Republic Act No. 7042,
as amended).
In case of joint venture agreements between government and private entities, the
same must comply with the Guidelines and Procedures for Entering into Joint
Venture Agreements of the National Economic Development Authority (NEDA).
SECTION 2. Board of Directors and Consultative Bodies of TEZ Operators
a) The seats of the Board of Directors of a TEZ Operator shall be allocated prorata according to the respective capital contributions of the TEZ Operator's
shareholders.
b) TEZ Operators are encouraged to reserve seats for independent directors on
their Boards for special interest groups, such as those representing
environmental, religious, and cultural interests, TEZ investors, TEZ residents
and other interests. In any case, TEZ Operators may form consultative bodies,
that will convene on a regular basis, for such special interest groups to assist
them in the formulation and implementation of their policies, plans ,
programs and projects.
SECTION 3. TEZ Administrator
a) The Board of Directors of each TEZ Operator shall appoint its TEZ
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Administrator, who shall be responsible for implementing the policies, plans,

programs and projects of the TEZ Operator's Board of Directors. The
minimum qualifications required of a TEZ Administrator are as follows:
1. Must have a bachelor's degree in any of the following fields: business,
law, tourism, public administration, urban or environmental planning,
real estate management or other relevant fields and have
demonstrated expertise therein;
2. Must have served in a managerial capacity for at least three (3) years
prior to his or her appointment; and
3. Must possess such other qualifications as may be prescribed by the
TEZ Operators Board of Directors.
b) In addition to such qualifications, all TEZ Administrators must undergo and
pass a training program of the Department to provide them with knowledge
and skills in the operation of a TEZ.
SECTION 4. Designation and Operation of TEZs. The designation of a TEZ does not
require ownership of the area to be organized as a TEZ. A TEZ Operator should
possess rights to use, develop, improve, acquire, administer, deal in, subdivide,
dispose, lease or sell, and to the fruits of one or more parcels of land within the area
in organizing a TEZ by virtue of ownership, lease or other agreements.
The designation of a TEZ does not vest ownership of the resources located therein
or the area itself on the TEZ operator.
The rights of a third party to land or resources within the zone shall be respected.
The TEZ Operator shall encourage such third party rights holders to participate in
policy making, planning and program development and implementation through
any of the following, as may be appropriate:
(a.)
(b.)
(c.)

Participation in the consultative bodies to be created by the TEZ

Operator among special interest groups as provided in Rule III,
Section 2 of these rules.
Organization and registration as a Tourism Enterprise; or
Other mechanisms and agreements between relevant parties that
recognize the common interests of the parties in the management of
the zone and respect of such third parties.

SECTION 5. Operation of Utilities. TIEZA shall grant franchises for, or supervise or

operate, public utilities within TEZs in coordination with the LGU or government
agency concerned.
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TIEZA shall however encourage, facilitate and provide incentives for private sector
participation in the construction and operation of public utilities and infrastructure
in the TEZs using any of the schemes allowed under Republic Act No. 6957, as
amended, otherwise known as the Build-Operate-and-Transfer Law.
SECTION 6. Acts of Development and Disposition. All activities to further develop
an area already declared as a TEZ or further acts of disposition of resources within a
TEZ shall be consistent with the Development Plan approved by TIEZA. There shall
be no deviation and/ or modification of the development plan without prior
authorization by TIEZA.
Rule IV.
Registration of Tourism Enterprises Within Tourism Enterprise Zones
SECTION 1. Jurisdiction. The TIEZA shall have sole and exclusive jurisdiction in the
registration of Tourism Enterprises. It shall not be impliedly repealed or modified.
SECTION 2. Qualification of Applicants. Any person, firm, association, partnership,
corporation, or any other form of business organization may apply for registration
as a tourism enterprise to avail of incentives and benefits. Applications for
registration shall comply with the applicable nationality, control and/ or ownership
requirements of the working capital thereof in accordance with the pertinent
provisions of the Philippine Constitution, Foreign Investments Act of 1991 as
amended and other relevant existing laws and regulations.
SECTION 3. Forms. All applications shall be submitted in the forms prescribed by
the TIEZA duly accomplished and submitted in three (3) copies.
SECTION 4. Documentary Requirements. The applicant for a Registered Tourism
Enterprise shall submit the following documents:
a. Duly accomplished Application Form;
b. Securities and Exchange Commissions Registration Certificate/Business
Permit;
c. Company Profile, containing basic data/ information on their technical,
financial, marketing and management capability/ competence to
undertake the proposed project or business within the tourism enterprise
zone;
d. Copies of articles of incorporation and by-laws;
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e. Resolution of the applicant's board of directors authorizing the filing of

the application; list of its directors, principal officers, and major
stockholders, including their respective bio-data;
f. List of machinery and equipment to be used by the applicant with a
statement of their capacity, ownership and/ or mode of procurement;
g. Endorsement from the TEZ Operator;
h. Proposed site development plan and location map accompanied by a
perspective drawing; construction timetable/ financial schedule; detailed
architectural and engineering plan; cost estimates and specifications;
i. Clearance/ Permit from the concerned Protected Area Management
Board if the proposed business area is within a Protected Area; and
j. Other supporting documents/ papers/ clearances as may be required by
the TIEZA depending upon the nature of the business and the type of
business organization of the applicant.
SECTION 5. Filing of Application. The application shall be filed with the TIEZA upon
payment of the corresponding non-refundable filing fee.
SECTION 6. Incomplete Papers. Within fifteen (15) days from receipt of the
application, TIEZA shall notify the applicant of all pertinent requirements not
complied with. The applicant shall have thirty (30) days from receipt of such notice
to comply with the said requirements. Only upon compliance will the application be
recorded/ processed. In this case, the date of compliance shall be deemed the date
of filing.
Applicants non-compliance within the said period shall be construed as an
abandonment of the application, unless upon written request, TIEZA extends the
said period.
SECTION 7. Publication. Applications for registration of a tourism enterprise will be
subject to publication requirement and payment of publication fee.
SECTION 8. Evaluation and Recommendation for Board Action. Upon submission
of all requirements and payment of the filing fee, TIEZA shall evaluate the
registration application of a tourism enterprise and if found viable in its technical,
financial, marketing and management aspects, the same shall be forwarded to the
Board for action.
SECTION 9. Board Action. Approval of the application shall be by resolution of the
Board. The action taken thereon together with the terms and conditions of
registration shall be communicated in writing to the applicant.
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Within fifteen (15) calendar days from receipt of the notice of board approval of the
application, a formal acceptance of the terms and conditions of registration shall be
submitted by the applicant. Only upon acceptance of these conditions and
satisfactory compliance with the pre-registration requirement therein stated, if any,
shall such approval be effective. Failure to accept within said period shall invalidate
the approval.
SECTION 10. Certificate of Registration. The Certificate of Registration shall be
issued by the TIEZA upon payment of the registration fee and the applicant has
submitted:
a) A sworn statement that, with the exception of those which the TIEZA has
been duly advised, all information/ data previously submitted to TIEZA are
still correct;
b) Statement of compliance with the pre-registration requirements, if any;
c) Sworn acceptance of the proposed terms and conditions of registration; and
d) Tax clearance certificate from the Bureau of Internal Revenue
SECTION 11. One-Stop Shop. The TIEZA shall establish a One-Stop Shop where
prospective TEZ investors and tourism enterprises can register under a single
window system to avail of the incentives and benefits under the Act, including the
issuance of all permits and visas. All government agencies involved shall assign
their respective representatives for this purpose. The TIEZA shall collect fees
necessary for the issuance of these permits and licenses.
SECTION 12. Finality of Decision on Registration. The decision of the TIEZA Board
on the registration application of a tourism enterprise is final and non-appealable.
Rule V.
Permits and Other Requirements
SECTION 1. Permits. The following permits shall be issued by the TIEZA to TEZ
Operators and Registered Tourism Enterprises:
a.
b.
c.
d.
e.

Building permit;
Occupancy permit;
Business permit;
Import permits; and
Such other permits necessary for the proper operation of the TEZ, as may be
required by the TIEZA Board

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SECTION 2. Submission of Requirements. Any registered tourism enterprise

intending to construct its own building or other structures, facilities and utilities
within a TEZ shall, before proceeding with the work, submit to the TIEZA all the
documentary requirements as herein below enumerated within forty-five (45) days
from its date of registration.
These documentary requirements are as follows:
1. Duly accomplished application form to be submitted to the TIEZA together with
the following documents:
a. In case the applicant is a registered owner of the lot:
1.
2.
3.
4.

Certified True Copy of Transfer Certificate of Title

Tax Declaration
Current Real Property Tax Receipt
Certificate of registration and business permit/ license issued by the
TIEZA
5. Three (3) sets of plans, specifications and bill of quantities prepared,
signed and sealed by duly licensed architects/ engineers
b. In case the applicant is not the registered owner of the lot, aside from the
aforementioned documents, the duly notarized copy of the contract of lease
or other pertinent contracts shall also be submitted.
c. PAMB Clearance/Permit and Eco-Tourism Plan if the building or structure is
inside a protected area.
SECTION 3. Collection of Fees/ Charges. The TIEZA shall collect such reasonable fees
and charges in connection with the application, processing and issuance of all the
permits required and performance of other regulatory functions. TIEZA shall set the
rates of such fees and charges taking into consideration the rates for similar
regulatory functions performed by other agencies of government. All fees and dues
collected shall accrue to TIEZA.
SECTION 4. Use of Structures/ Roads. If the use of any structure or road inside the
TEZ or the excavation of the same is required by the registered TEZ operator/
tourism enterprise to meet its building construction requirements, an application
for such purpose shall first be submitted to TIEZA. The public grounds, structures or
roads shall be restored to their original shape and condition immediately after
completion of the construction work at the expense of the TIEZA registered
enterprise/ TEZ operator.
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SECTION 5. Building Inspection. A completed building/ structure/ facility/ utility

and newly installed equipment and machinery shall be inspected by the TIEZA to
determine whether it has complied with the approved building specifications and
plant layout.
If the inspection indicates that the building was constructed in accordance with the
approved building specifications and plant layout and satisfies health, safety,
cultural and environmental requirements, then the TIEZA shall issue the
corresponding occupancy permit and/ or permit to operate the equipment and
machineries after payment of the fees by the registered enterprise prior to the start
of operation.
If the inspection shows that health, safety and environmental requirements have not
been met or that there have been deviations from the approved plans and plant
layout, the TIEZA may withhold the grant of the occupancy permit or the permit to
operate equipment and machineries until the necessary adjustments shall have
been made within a reasonable period of time as determined by the TIEZA.
SECTION 6. Temporary Permit to Operate. If the deficiencies noted during the
inspection do not endanger life and property, a temporary permit to start operation
may be granted: Provided, that the TIEZA shall furnish the registered enterprise
with a detailed listing of the improvements required and shall set a deadline of not
more than six (6) months, for the registered enterprise to carry-out such
improvements: Provided further, that the registered enterprise shall report to the
TIEZA within the prescribed deadline the results of adjustments made and shall
request the TIEZA to re-inspect the plant for final approval.
SECTION 7. Occupational Safety. The TIEZA, in coordination with the Department of
Labor and Employment (DOLE), shall conduct periodic inspection of facilities and
installations within the TEZ to check on health, medical, occupational and safety
standards of the buildings, structures and equipment and machineries and the
general conditions and maintenance of the facility. The registered enterprise shall
correct any deficiency or violations of pertinent regulations noted in such inspection
within a reasonable period of time to be determined by the TIEZA.
SECTION 8. Inspection. The TIEZA shall conduct regular inspection of the facilities
within the TEZ.

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Rule VI.
Coordination with Local Government Units on Governance within TEZs
SECTION 1. Role of the Local Government Units (LGUs). The LGUs shall retain their
basic autonomy and identity in accordance with the Local Government Code. No
TEZ shall be designated without a development plan duly approved by TIEZA and
without the subsequent approval, by resolution, by the LGU concerned. Upon
approval by the concerned LGU of the development plan, and the subsequent
designation of a TEZ, TIEZA shall have sole authority to regulate and supervise the
operations within the TEZ including the issuance of permits and licenses.
LGUs are encouraged to provide incentives for registered tourism enterprises inside
and outside the TEZ through, among others, reduction in applicable real estate
taxes.
SECTION 2. Agreements. TIEZA shall execute a Memorandum of Agreement with
the concerned LGU to define the framework on their verification and receipt of the
one third (1/3) share from remittances collected by TIEZA from the Gross Income
Taxes.
Rule VII.
Guiding Environmental Policies and Regulations
SECTION 1. Environmental Standards - The TIEZA, in coordination with the
Department of Environment and Natural Resources (DENR), shall implement
established policies and guidelines to ensure environmentally and socially
acceptable development of TEZs and registered tourism enterprises under its
jurisdiction. TIEZA regulations to protect and conserve environmental quality in
TEZ shall be consistent with national standards set by the DENR.
SECTION 2. Pre-Designation Requirement - As a pre-designation requirement, an
applicant TEZ Operator shall comply with the procedures of the Environmental
Impact Statement (EIS) system under Presidential Decree 1586 and to secure an
Environmental Compliance Certificate (ECC).
SECTION 3. Regulatory Functions - The TIEZA shall formulate and implement
environmental policies and regulations, issue permits and/ or clearances and grant
franchises to entities that will engage in environmental management within the TEZ.
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TIEZA shall monitor compliance in the area based on the limits set in the respective
ECC's and conduct or cause to be conducted regular sampling and testing of
regulated emissions, dusts, particulates, effluents, sludge, noise levels and other
concerns.
SECTION 4. Waste Management Program - Each TEZ and registered tourism
enterprise shall be required to establish and adopt a sound waste management
program specifically but not limited to solid waste, sludge and effluents. Said
program shall be monitored and validated on a periodic basis.
SECTION 5. Environmental Management Services The TIEZA shall have the option
to develop, establish, manage and operate, or to privatize, through the grant of
franchise or under a build-operate-transfer scheme under Republic Act 6957, as
amended, with private companies, developers or practitioners, services and physical
infrastructure related to environmental management. This shall include among
others, wastewater and sludge sampling and testing, wastewater treatment
facilities, incinerators, sanitary landfills, environmental laboratories, and other
waste treatment facilities (WTF).
In no case, however, shall any WTF operator be allowed to bring into the TEZ for
treatment, sorting, recycling or any other process industrial wastes from other
industries operating outside the jurisdiction of the TEZ.
SECTION 6. Agreements Within thirty (30) days from promulgation of these Rules,
the TIEZA shall enter into a Memorandum of Agreement with the DENR and other
concerned government agencies for an integrated and simplified implementation of
environmental standards within TEZs and by registered tourism enterprises outside
of the zone.
The TIEZA in coordination with the Department shall also execute the appropriate
agreement with the DENR to define the policy framework and implementing
guidelines on the possible declaration of existing areas that are already covered by
the National Integrated Protected Areas System (NIPAS) with ecotourism potentials
to TEZ.
SECTION 7. Adoption of Environmental Laws and Regulations - All Philippine
environmental laws particularly Presidential Decrees 984, 1151, 1152, 1586, as well
as Republic Act Nos. 6969 and 7526, including laws concerning biodiversity
conservation and environmental protection and the corresponding implementing
guidelines relevant to the operation of a TEZ are hereby adopted without prejudice
to other rules and regulations that may be prescribed by the TIEZA on
environmental protection.
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Rule VIII.
Labor and Management Relations
SECTION 1. Labor Dispute Resolution Office. TIEZA adheres to the policy that
industrial peace and harmony can only be achieved through compliance with labor
laws and standards and through effective enforcement mechanism by concerned
agencies. It shall, in coordination with the DOLE establish a labor dispute resolution
office to mediate between workers and employers.
SECTION 2. Agreement. The DOLE and TIEZA shall execute a Memorandum of
Agreement to formulate the specific guidelines, rules and regulations on the
following:
1.

Maintenance of Industrial Peace in areas to be designated as TEZ

and registered tourism enterprises;

2.

Conduct of Labor Education Program; and

3.

Enforcement of Labor Standards rules in areas to be designated as

TEZ and registered tourism enterprises.
Rule IX.
Grant and Administration of Incentives

SECTION 1. Entitlement to Incentives. TIEZA may grant incentives to registered TEZ

Operators and tourism enterprises. TIEZA shall encourage the dispersal of economic
activities in the countryside, particularly in the least developed areas identified in
the annual Investment Priorities Plan (IPP).
The grant of certain incentives to tourism enterprises outside TEZs shall be
governed by Rule XIII of these Rules.
SECTION 2. Application for Availment of Incentives. All applications for availment of
incentives under the Act shall be filed with TIEZA.

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SECTION 3. Grant and Administration of Incentives. Incentives may be granted by

TIEZA within ten years from effectivity of this Act. Incentives thus granted shall
thereafter be administered by TIEZA pursuant to these rules.

Rule X.
General Conditions for Availment of Incentives and Other Privileges
SECTION 1. Compliance with Obligations. The TEZ Operator and/ or the Registered
Tourism Enterprise shall observe and abide by the provisions of the Act, its
Implementing Rules and Regulations, the terms and conditions for its designation
and/ or registration and take adequate measures to ensure that its obligations
hereunder as well as those of its officials, employees and stockholders are faithfully
discharged.
SECTION 2. Compliance with Directives. The TEZ Operator and Registered Tourism
Enterprise shall comply with the directives and circulars which TIEZA may issue
from time to time pursuant to its powers under the Act.
SECTION 3. Visitorial Powers. The TEZ Operator/ Registered Tourism Enterprise
shall allow the duly authorized representative(s) of TIEZA to examine its books of
accounts and other pertinent records and documents to ascertain compliance with
this Act, its implementing guidelines, and the terms and conditions of its
designation/ registration.
SECTION 4. Delinquent TEZ Operator/ Registered Tourism Enterprise. No
availment of incentives may be allowed a TEZ Operator/ Registered Tourism
Enterprise that is found delinquent in compliance with any of the terms and
conditions for its designation/registration including such reports and statistical
data TIEZA may require.
SECTION 5. Non-registered Activities. TEZ Operator/ Registered Tourism Enterprise
engaged or proposing to engage in non-registered activities shall install an adequate
accounting system segregating investments, revenues, costs and profits or losses of
the registered operations.
SECTION 6. Compliance with Reportorial Requirements. A TEZ Operator or
Registered Tourism Enterprise shall maintain distinct and separate books of
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accounts for its registered operations and shall submit financial and other reports/
documents to TIEZA on or before their respective due dates as follows:
Reports Due Date
A. Copies of Audited Financial Statements fifteen (15) calendar days from the
date of filing with the Bureau of Internal Revenue
Balance Sheet
Income Statement
Statement of Cost of Sales
Statement of Operating & Administrative Expenses
B. Income Tax Returns - fifteen (15) calendar days from filing thereof;
C. Amendment to the Articles of Incorporation and/ or by-laws - thirty (30)
calendar days from the date of registration of said amendments with the
Securities and Exchange Commission;
D. Replacement of any director or other principal officer - thirty (30) calendar days
after said replacement with an indication of the nationality of the officer and
accompanied by a copy of his/ her certificate of citizenship, if a naturalized
Filipino;
E. Any change in equity ownership - thirty (30) calendar days after said change;
F. Change of address or principal place of business within ten (10) calendar days
after such change;
G. Change of its authorized representative to TIEZA within ten (10) calendar days
from such change;
H. Notice of start of operation - seven (7) days from date of actual start of
operations;
I. Statement of the total peso value of incentives granted under the Act from
January one to December thirty-one of the preceding year - not later than
January thirty one of the current year; and
J. Such other reports as may be prescribed/required by TIEZA through
appropriate circulars /memoranda in coordination with other agencies.
Rule XI.
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Fiscal Incentives to TEZ Operators and Registered Tourism Enterprises within

the TEZ
SECTION 1. Income Tax Holiday (ITH)
1. Period of Availment TEZ Operators or Registered Tourism Enterprises shall
be exempt from income taxes levied by the National Government on its
registered activities as follows:
a. New enterprises in Greenfield and Brownfield Tourism Zones for six
(6) years from start of business operations
b. Existing enterprises in Brownfield Tourism Zone for six (6) years
from the time of completion of the expansion or upgrade of its
facilities
2. Additional Period of Availment the income tax holiday incentive may be
extended but in no case to exceed a total additional period of six (6) years.
Provided, that prior to the expiration of the first six (6) years, the registered
enterprise will undertake a significant expansion or upgrade of its facilities
amounting to at least fifty percent (50%) of the original investment;
Provided, further that for purposes of availment of this incentive, the TEZ
Operator or the Registered Tourism Enterprise shall apply in writing to
TIEZA for the additional period not later than three (3) months prior to the
expiration of the initial Income Tax Holiday and shall submit proof of
compliance with the criteria herein; Provided, finally, that the Board may in
exceptionally meritorious cases allow an enterprise which will undertake an
expansion or upgrade of its facilities for less than fifty per cent (50%) of the
original investment to avail of the income tax holiday incentive, but the
period of availment shall be prorated to the value of the expansion or
upgrade.
3. Conditions for Availment by Existing Enterprises in Brownfield Zones Existing enterprises in Brownfield Zones may avail of the non-extendible
income tax holiday subject to the following conditions:
a. The Registered Tourism Enterprise undertakes a substantial
expansion or upgrade of its facilities.
b. The cost of expansion or upgrade of its physical assets amount to at
least 50% of the original investment.

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c. The expansion or upgrade has resulted in an extension of the life of its

assets or increase in the capacity or efficiency of the enterprise that
benefits the current and future periods.
d. In appropriate cases, there is a significant change in its category
classification under the Department of Tourisms accreditation system
The Board may in exceptionally meritorious cases allow an enterprise which
will undertake an expansion or upgrade of its facilities for less than fifty per
cent (50%) of the original investment to avail of the income tax holiday
incentive, but the period of availment shall be prorated to the value of the
expansion or upgrade.
4. All TEZ Operators and Registered Tourism Enterprises upon compliance with
the terms and conditions for the availment of Income Tax Holiday, shall be
issued a Certificate of Entitlement which shall be attached to its Annual
Income Tax Return.
5. Net Loss Carry Over - The net operating loss of the TEZ Operator or
Registered Tourism Enterprise for any taxable year immediately preceding
the current taxable year shall be carried over as a deduction from gross
income for the next six (6) consecutive taxable years immediately following
the year of such loss. Provided, that such loss has not been previously offset
as a deduction from gross income.
SECTION 2. Gross Income Taxation (GIT). Except for real estate taxes and such fees
as maybe imposed by TIEZA, a new enterprise shall be exempt from the payment of
all national internal revenue taxes and all local impost, fees, licenses, assessments
and taxes.
1. Gross Income Tax Rate - In lieu of all national internal revenue taxes and
local taxes, impost, assessments, fees and licenses, registered tourism
enterprises shall pay a tax of five percent (5%) on its gross income earned
from its registered activities. This shall be directly remitted as follows:
a. One - third (1/3) to be proportionately allocated among affected cities
or municipalities based on the area occupied by the TEZ Operator/
Registered Tourism Enterprise as determined by TIEZA.
b. One - third (1/3) to the national government
c. One - third (1/3) to TIEZA
2. Endorsement by TIEZA TIEZA shall issue, on an annual basis, a Certificate of
Entitlement (CE) for those enjoying ITH or an Endorsement Letter (for those
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enjoying other incentives), to all registered tourism enterprises entitled to

tax incentives, and to attach the applicable CE/Endorsement letter to their
annual Income Tax Returns (ITRs) upon filing thereof. In its absence , the BIR
shall not allow any claim for ITH/5% GIT incentive that is reflected in the
annual ITR. For taxpayers filing on-line, submission of CE/endorsement
letter shall be done manually until such time that the BIRs Electronic
Integrated Tax System (e-ITS) facility is enhanced for this purpose.
3. Allowable Deductions - TIEZA shall in coordination with the Bureau of
Internal Revenue formulate the appropriate measure that shall define the
allowable deductions of TEZ Operators and registered tourism enterprises.
SECTION 3. Importations of Capital Investment and Equipment. TEZ Operators and
Registered Tourism Enterprises shall be entitled to an exemption of one hundred
percent (100%) of all taxes and customs duties on the importation of capital
investment and equipment subject to the following conditions:
a) The capital investment and equipment are directly and actually needed
and shall be used exclusively by the TEZ Operator and/ or the Registered
Tourism Enterprise in its registered activity;
b) Subject to reasonable allowances, the rated capacity of the capital
equipment to be imported shall be within the registered capacity of the
TEZ Operator and the Registered Tourism Enterprise.
Any sale, transfer, assignment, donation or other form of disposition of originally
imported capital investment and equipment/ machinery, brought into the TEZ duty
and tax-free, within five (5) years from date of acquisition shall require prior
approval of the Board. Such approval shall be granted only if the sale or other form
of disposition is made:
a) To a TEZ Operator or Registered Tourism Enterprise entitled to duty and
tax free importation of machinery or to any other enterprise enjoying
similar incentives under existing laws;
b) For reasons of proven technical obsolescence;
c) For purposes of replacement to improve and/ or expand the operations of
the registered enterprise intending to sell, transfer, assign, donate or
otherwise dispose of such machinery or spare parts; and
d) In cases of withdrawal or cessation from operations of the registered
Tourism Enterprise, subject to payment of applicable duties and taxes and
such other conditions as may be prescribed by the Board.
If the TEZ Operator or Registered Tourism Enterprise sells, transfers or disposes of
this machinery or equipment without prior approval of the Board within five (5)
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years from date of acquisition, the Registered Tourism Enterprise and the vendee,
transferee, or assignee shall be solidarily liable to pay twice the amount of the tax
exemptions granted.
Any sale, transfer, assignment, donation or other form of disposition of capital
equipment, brought into the TEZ duty- and tax- free, after five (5) years from date of
acquisition shall require prior approval of the TIEZA Chief Operating Officer, subject
to the payment of the applicable taxes.
Attached as Annex A and forming part of these Rules is a list of capital equipment
eligible for tax and duty-free importation incentives.
SECTION 4.
Transportation Equipment and Spare Parts.
Importation of
transportation equipment and the accompanying spare parts of new and expanding
registered enterprises shall be exempt from customs duties and national taxes
provided that:
a) They are not manufactured domestically in sufficient quantity, of
comparable quality and at reasonable prices;
b) They are reasonably needed; and
c) Shall be used exclusively by an accredited tourism enterprise.
SECTION 5. Goods and Services. Subject to rules and regulations which properly
define and limit goods actually consumed for services rendered by various
registered tourism enterprises within a TEZ shall be entitled to the following:
a) One hundred percent (100%) exemption from all taxes and customs duties:
Provided, however, that no goods shall be imported for the purpose of
operating a wholesale or retail establishment in competition with the Duty
Free Philippines Corporation (DFPC); and
b) A tax credit equivalent to all national internal revenue taxes paid on all
locally-sourced goods and services directly or indirectly used by the
registered enterprise for services actually rendered within the TEZ.
SECTION 6. Social Responsibility Incentive. TEZ Operators and Registered Tourism
Enterprises shall be entitled to a tax deduction equivalent to fifty percent (50%) of
the cost of environmental protection or cultural heritage, preservation activities,
sustainable livelihood programs for local communities which may be chosen from
the list of activities identified by the National Anti-Poverty Commission (NAPC), and
other similar activities as may be determined by the Board.
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The approval of the TIEZA shall be obtained prior to undertaking such activities/
programs.
Rule XII.
Non-fiscal Incentives Available to TEZ Operators and Registered Tourism
Enterprises
SECTION 1. Employment of Foreign Nationals.
a) Entitlement - A TEZ Operator or a Registered Tourism Enterprise may
employ foreign nationals in executive, supervisory, technical or advisory
positions; Provided, that executive positions shall pertain only to the
president, vice-president, treasurer and general manager, or their
equivalents: Provided, further, that the total number of foreign nationals
employed by the TEZ Operator or Registered Tourism Enterprise in
supervisory, technical or advisory positions shall not at any time exceed
five percent (5%) of its workforce unless expressly authorized by the
TIEZA Board. Subject to regulations issued by the Bureau of Immigration
(BI), the TIEZA may issue working visas for periods of up to two (2) years,
subject to the foreign nationals securing of the appropriate Employment
Permits (EP) from the Department of Labor and Employment (DOLE). To
ensure proper transfer of technology, the employers of foreign nationals
shall provide an Understudy Training Programme (UTP) and designate at
least two Filipino understudies. The functions of these employees must be
deemed permanent, and they must require skills or expertise that is scarce
in the Philippines.
b) TIEZA may likewise issue Special Work Permits to foreign nationals to
perform short-term work of up to three (3) months renewable for a nonextendible period not exceeding three (3) months.
c) Length of Employment - A TEZ Operator or a Registered Tourism
Enterprise may employ foreign nationals for a period not exceeding five
(5) years from its registration, unless expressly authorized by the TIEZA
Board.
d) Spouse and Unmarried Minor Children - The spouse and unmarried
children under eighteen (18) years of age of the foreign national employed
under the provisions of the Act shall also be permitted to enter and reside
in the Philippines during the same period of employment.
e) The EP of a foreign national may be suspended or cancelled/ revoked,
after due process, based on any of the following grounds:
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1. Continued stay of the foreign national may result in damage

to the interest of the industry or country;
2. Non-compliance with any of the requirements or conditions
for which the EP was issued;
3. Misrepresentation of facts in the application;
4. Submission of falsified or tampered documents;
5. Derogatory record of foreign national; and
6. Employer has terminated the employment of the foreign
national.
SECTION 2. Importation of Professional Instruments and Household Effects. Subject
to Section 105 (h) of the Tariff and Customs Code, the professional instruments and
implements, tools of trade, occupation or employment, wearing apparel and
personal household effects of foreign nationals who shall settle in the Philippines in
connection with their registered activity, may be imported exempt from the
payment of import duties and taxes.
SECTION 3. Special Investors Resident Visa. A foreign national who invests at least
Two Hundred Thousand Dollars ($200,000.00) in a TEZ and/ or a Registered
Tourism Enterprise, his dependents, spouse and unmarried children under 18 years
of age, shall be entitled to a special investors resident visa enabling the foreign
national to reside in the Philippines while his or her investment subsists.
SECTION 4. Foreign Currency Transactions. Subject to the provisions of Section 72
of Republic Act No. 7653, as amended, otherwise known as the New Central Bank
Act, the following rights are hereby guaranteed:
1. Repatriation of Investment
In case of foreign investments, the right to repatriate the entire proceeds
of the liquidation of the investment in the currency in which the
investment was originally made and at the exchange rate prevailing at the
time of repatriation.
2. Remittance of Foreign Exchange
The right to remit earnings from a foreign investment in the currency in
which the investment was originally made and at the exchange rate
prevailing at the time of remittance.
3. Foreign Loans and Contracts
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The right to remit at the exchange rate prevailing at the time of

remittance such sums as may be necessary to meet the payments of
interest and principal on foreign loans and foreign obligations arising
from technological assistance contracts.
SECTION 5. Requisition of Investment. There shall be no requisition of the property
of the TEZ Operator or the Registered Tourism Enterprise, except in the event of
war or national emergency and only for the duration thereof. In such case, the
affected person shall be entitled to just compensation, and shall have the right to
repatriate such compensation as provided for in Section (3) above.
SECTION 6. Lease and Ownership of Land. Without prejudice to existing laws
regulating the ownership of land by individuals and corporations, and consistent
with the provisions of Republic Act 7652, otherwise known as the Investors Lease
Act, lands and buildings in each TEZ may be leased to foreign investors for a period
not exceeding fifty (50) years, renewable once for a period of not more than twentyfive (25) years.
The leasehold right acquired under long-term contracts may be sold, transferred or
assigned, subject to the conditions set forth under the Investors Lease Act and the
approval of the Board which shall ensure continuing compliance with the terms and
conditions of designation as a TEZ.
BOOK THREE
TOURISM ENTERPRISES OUTSIDE TOURISM ENTERPRISE ZONES
Rule XIII.
Incentives available to Tourism Enterprises outside of TEZs
SECTION 1. Coverage. Only an existing accommodation establishment not located
within a TEZ shall be entitled to claim incentives under this Rule.
SECTION 2. Incentives. In case an enterprise outside the TEZ elects to avail itself of
the incentives provided under the Act, it shall do so in writing and file its application
for registration and shall be governed by the following provisions:
i) In the case an existing enterprise outside the zone opts to avail of
the Income Tax Holiday incentive under this Act, it shall be
entitled to a non-extendible Income Tax Holiday incentive not to
exceed six (6) years from the time of completion of the expansion
or upgrade and subject further to the following conditions:
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a) The Registered Tourism Enterprise undertakes a substantial

expansion or upgrade of its facilities;
b) The cost for the expansion or upgrade of its physical assets
amounts to at least 50% of the original investment;
c) The expansion or upgrade has resulted in an extension of the
life of its assets or increase in the capacity or efficiency of the
enterprise that benefit current and future periods; and
d) In appropriate cases, there is a significant change in its
category classification under the Department of Tourisms
accreditation system.
ii. It shall also be entitled to import capital equipment free of taxes
and duties when necessary for such expansion, renovation or
upgrade. Provided, finally, that the Board may in exceptionally
meritorious cases allow an enterprise which will undertake an
expansion or upgrade of its facilities for less than fifty per cent
(50%) of the original investment to avail of the income tax holiday
incentive, but the period of availment shall be prorated to the
value of the expansion or upgrade.
The incentives offered under this Act shall be without prejudice to the
availment of other incentives under other laws; Provided that there shall be
no double availment of same or similar incentives; Provided further, that
where such laws provide for similar incentive schemes as those contained in
the Act, the enterprise may elect to avail of the scheme provided only under
one particular law.
SECTION 3. Tourism enterprises located in special economic zones created under
Republic Act 7227, otherwise known as the Bases Conversion and Development Act
of 1992, and Republic Act 7916 otherwise known as the Special Economic Zone Act
of 1995, and other special laws, shall continue to be governed by the same.
BOOK FOUR
SUSPENSION OR CANCELLATION
Rule XIV.
Suspension or Cancellation of Designation/ Registration and Incentives
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SECTION 1. Grounds for Cancellation/ Suspension. TIEZA may suspend/ cancel,

wholly or partially, any incentive granted under this Act for any of the following
causes:
a.
b.
c.

Any violation of this Act, its implementing guidelines or the terms and
conditions of its designation/ registration.
For material misrepresentation or false statements made to TIEZA before or
after its designation/ registration.
Whenever the project ceases to be viable and its continued operation would
require additional costs to the economy.

SECTION 2. Withdrawal from Registration. Whenever a TEZ operator and/ or a

registered enterprise decides to withdraw from business or suspend its registered
operations, written notice thereof shall be sent to TIEZA before the decision is
implemented.
Withdrawal from business operations shall automatically cancel the certificate of
designation/ registration which shall then be turned-over to TIEZA. The enterprise
and its stockholders shall cease to be entitled to the incentives provided for in this
Act.
SECTION 3. Refund and Penalties. - In case of cancellation of the certificate granted
under this Act, TIEZA, may, in appropriate cases, require the refund of incentives
availed of under this Act and impose the corresponding penalties.
SECTION 4. Penalty for Violation of Terms and Conditions on Accreditation.
Registered Tourism Enterprises availing of incentives under this Act if found to
have violated the terms of their accreditation by the Department shall be ordered to
pay back taxes in the amount equivalent to the difference between the taxes that
they should have paid had they not availed of the incentives under this Act and the
amount of taxes being paid by them under the same incentive scheme.
The back taxes shall be computed up to three (3) years directly preceding the date
of promulgation of the decision or order finding that the registered tourism
enterprise violated the terms of its accreditation. These back taxes shall be collected
by TIEZA and distributed as follows:
a. One-third to the national government;
b. One-third to the LGUs concerned, to be shared by them equally should
there be more than one such LGU; and
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c. One-third to TIEZA
The Department and TIEZA shall promulgate the necessary implementing rules and
regulations to enforce this provision.
BOOK FIVE
OTHER PROVISIONS
Rule XVI.
Miscellaneous and Transitory Provisions
SECTION 1. Termination of Business. Investors in the TEZ who intend to terminate
business or operations shall comply with such requirements and procedures which
the TIEZA shall set, particularly those relating to the clearing of debts. The assets of
the closed enterprises can be transferred and the funds can be remitted out of the
TEZ subject to rules, guidelines and procedures to be prescribed jointly by the
Bangko Sentral ng Pilipinas, the Department of Finance and the TIEZA.
SECTION 2. Investigations/ Hearings. The TIEZA shall promulgate rules and
procedures governing the conduct of investigations and hearings involving
violations of the Act and these Implementing Guidelines.
SECTION 3. Penalties. Fines and penalties for violation of these Rules and pertinent
circulars and memoranda shall be defined and promulgated by the TIEZA Board.
SECTION 4. Circulars. The TIEZA shall from time to time, issue relevant memoranda
and circulars for proper implementation of the provisions of these Implementing
Guidelines.
SECTION 5. Amendments. The TIEZA may amend, suspend or revoke these Rules as
may be necessary: Provided, however, that any amendment or any decision taken by
the TIEZA in connection thereto shall take effect fifteen (15) days after the date of
publication in a newspaper of general circulation in the Philippines.
SECTION 6. Separability Clause. If any clause, sentence, provision or section of these
Rules shall be held invalid or unconstitutional, the remaining parts thereof shall not
be affected thereby.
SECTION 7. Effectivity. These Rules shall take effect fifteen (15) days after the date
of publication in a newspaper of general circulation in the Philippines.
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