On 12 April 2019, the Philippines Bureau of Internal Revenue (BIR) has issued revenue regulations (RR) No. 5-2019, which implements the tax incentives provisions of RA No. 10771 (Philippine Green Jobs Act of 2016).

The regulation explains following measures:

Definition of terms

For purposes of the regulation, RR 5-2019 defines green jobs as employment that contributes to preserving or restoring the quality of the environment, be it in the agriculture, industry or services sector including, but not limited to, protecting ecosystems and biodiversity, reducing energy, materials and water consumption through high efficiency strategies, and minimizing or altogether avoiding the generation of all forms of waste and pollution.

Tax incentives

A qualified business enterprise shall be entitled to a special deduction from tire taxable income equivalent to 50% of the total expense for skills training and research development expenses subject to conditions that deduction shall be availed of in the taxable year in which the expenses have been paid or incurred and that the taxpayer can substantiate the amount and direct connection of expense claimed as deduction with sufficient evidence, such as official receipts, delivery receipts and other records.

Procedure for availing of the tax incentives

In order to avail of the tax incentives, qualified business enterprises must register or update their registration and submit the following documents with the revenue district office where they are registered: (i) annual income tax returns/annual information return, sworn list of the total expenses paid or incurred for skills training and research development during the year, (ii) sworn list of activities and/or projects undertaken by the institution and the cost of each undertaking, particularly indicating where and how the expenses were paid or incurred, and (iii) sworn declaration that the expenses paid or incurred for skills training and research development are directly connected or related to the activities and/or projects of the business enterprise that generate and sustain green jobs.

Time and place of filling returns

To claim special 50% deduction qualified business enterprise shall be filled at the time of filling income tax return and shall be filled in the Revenue District Office where qualified business enterprise is registered.

These regulations shall take effect 15 days after publication in a newspaper of general circulation, whichever comes first.