Capital Equipment, Spare Parts, Raw Materials, and Accessories
- Document symbol
- G/LIC/N/3/PHL/17
- Original language
- English
- Published on
- 19/08/2025
Outline of Systems
Q1. Give a brief description of each licensing system as a whole and, with respect to each, reply to the following questions as relevant, placing all of the material with respect to a given system in sequence together, and using cross references as appropriate when elements which have already been described are also present in another system.
For availment of the tax- and duty-free importation of capital equipment, raw materials, spare parts, and accessories under Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, business enterprises registered with the Investment Promotion Agencies (IPAs), including the BOI, are required to secure from said IPAs a Certificate of Authority to Import (CAI). As a condition for its issuance, the capital equipment, spare parts, raw materials, and accessories sought to be imported must be directly and exclusively used in the registered activity of the registered business enterprise (RBE); and that said items or goods are not locally available in sufficient quantity or of comparable quantity and at reasonable price.
Purposes and Coverage of Licensing
Q2. Identify each licensing system maintained and state what products, appropriately grouped, are covered.
The CAI system regulates the importation of capital equipment, raw materials, spare parts, and accessories with incentives (duty/tax and duty-free) and is limited to RBEs only. The imported items refer to capital equipment, spare parts, raw materials, and accessories that will be used exclusively in an RBE’s activity, as may be determined by the IPAs.
Q3. The system applies to goods originating in and coming from which countries?
The CAI applies to the importation of capital equipment, raw materials, spare parts, and accessories originating in and coming from all countries, without exceptions.
Q4. Is the licensing intended to restrict the quantity or value of imports, and if not, what are its purposes? Have alternative methods of accomplishing the purposes been considered and if so which? Why have they not been adopted?
The CAI system does not intend to restrict the quantity or value of imported items.
Q5. Cite the law, regulation and/or administrative order under which the licensing is maintained. Is the licensing statutorily required? Does the legislation leave designation of products to be subjected to licensing to administrative discretion? Is it possible for the government (or the executive branch) to abolish the system without legislative approval?
The legal basis for the issuance of the CAI is Section 1, Rule 9 of the Implementing Rules and Regulations of the CREATE Act in accordance with Sections 294(D) and 294(E), Chapter II, Title XII of the said law.
Procedures
Q6. For products under restriction as to the quantity or value of imports (whether applicable globally or to a limited number of countries or whether established bilaterally or unilaterally):
Q6.I. Is information published, and where, concerning allocation of quotas and formalities of filing applications for licences? If not, how is it brought to the attention of possible importers? Of governments and export promotion bodies of exporting countries and their trade representatives? Is the overall amount published? The amount allocated to goods from each country? The maximum amount allocated to each importer? How to request any exceptions or derogations from the licensing requirement?
No quota restrictions applicable.
Q6.II. How is the size of the quotas determined: on a yearly, six-monthly or quarterly basis? Are there cases where the size of quota is determined on a yearly basis but licences are issued for imports on a six-monthly or quarterly basis? In the latter case, is it necessary for importers to apply for fresh licence on a six-monthly or quarterly basis?
Q6.III. Are licences allotted for certain goods partly or only to domestic producers of like goods? What steps are taken to ensure that licences allocated are actually used for imports? Are unused allocations added to quotas for a succeeding period? Are the names of importers to whom licences have been allocated made known to governments and export promotion bodies of exporting countries upon request? If not, for what reason? (Indicate products to which replies relate.)
Q6.IV. From the time of announcing the opening of quotas, as indicated in I above, what is the period of time allowed for the submission of applications for licences?
Q6.V. What are the minimum and maximum lengths of time for processing applications?
Q6.VI. How much time remains, at a minimum, between the granting of licences and the date of opening of the period of importation?
Q6.VII. Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
Q6.VIII. If the demand for licences cannot be fully satisfied, on what basis is the allocation to applicants made? First come, first served? Past performance? Is there a maximum amount to be allocated per applicant and, if so, on what basis is it determined? What provision is made for new importers? Are applications examined simultaneously or on receipt?
Q6.IX. In the case of bilateral quotas or export restraint arrangements where export permits are issued by exporting countries, are import licences also required? If so, are licences issued automatically?
Q6.X. In cases where imports are allowed on the basis of export permits only, how is the importing country informed of the effect given by the exporting countries to the understanding between the two countries?
Q6.XI. Are there products for which licences are issued on condition that goods should be exported and not sold in the domestic market?
Q7. Where there is no quantitative limit on importation of a product or on imports from a particular country:
There is no quantitative limit on the importation of capital equipment, raw materials, spare parts, and accessories.
Q7.a. How far in advance of importation must application for a licence be made? Can licences be obtained within a shorter time-limit or for goods arriving at the port without a licence (for example, owing to inadvertency)?
The RBE must apply for the CAI prior to importation. The CAI is issued after evaluation of the application and remains valid for a period of one (1) year from the date of issuance; otherwise, the CAI will be forfeited.
Q7.b. Can a licence be granted immediately on request?
The RBE must also secure a Certificate of Non-Local Availability (CNLA) to ensure that the imported items are not locally available, in sufficient quantity or quality.
Q7.c. Are there any limitations as to the period of the year during which application for licence and/or importation may be made? If so, explain.
There are no limitations as to the period of the year during which application for CAI and subsequent importation may be made.
Q7.d. Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
The conditions of eligibility to apply for the CAI are decided upon by the IPAs, i.e., registration of the firm’s activity under CREATE Act.
Q8. Under what circumstances may an application for a licence be refused other than failure to meet the ordinary criteria? Are the reasons for any refusal given to the applicant? Have applicants a right of appeal in the event of refusal to issue a licence and, if so, to what bodies and under what procedures?
Issuance of the e-CAI to a participant may be refused due to violation of the terms and conditions of its registration under the MVDP, as laid out in EO No. 156. In such cases, the participant is informed by the BOI of the reason for refusal, as well as the steps that may be taken to regain compliance with the terms and conditions of its registration.
Eligibility of Importers to Apply for Licence
Q9. Are all persons, firms and institutions eligible to apply for licences: (If not, is there a system of registration of persons or firms permitted to engage in importation? What persons or firms are eligible? Is there a registration fee? Is there a published list of authorized importers?) a) under restrictive licensing systems? b) under non-restrictive systems?
Only firms whose activities appear in the Strategic Investments Priority Plan (SIPP) and are duly registered with an IPA are eligible to apply for the CAI and subsequently, import capital equipment, raw materials, spare parts, and accessories duty/tax and duty free.
The IPA is responsible for evaluating and approving applications for registration under the CREATE Act. Upon approval of application, newly-registered firms are issued with a Certificate of Registration by the IPA and the terms and conditions that the firm must comply with in order to enjoy incentives which includes the importation of capital equipment, raw materials, spare parts, and accessories duty/tax and duty free.
Each IPA imposes filing fee for application for registration. The filing fee imposed by BOI is as follows:
|
Project costs not exceeding PhP 4 million |
PhP 1,500.00 |
|
Project costs exceeding PhP 4 million but not over PhP 20 million |
PhP 3,000.00 |
|
Project costs exceeding PhP 20 million but not over PhP 50 million |
PhP 4,500.00 |
|
Project costs exceeding PhP 50 million |
PhP 6,000.00 |
The issuance of the BOI Certificate of Registration also requires the payment of a fee equivalent to 1/10 of 1% of the project cost, not less than PhP 3,000.00 but not to exceed PhP 15,000.00.
Documentational and Other Requirements for Application for Licence
Q10. What information is required in applications? Submit a sample form. What documents is the importer required to supply with the application?
Each IPA implements its own procedure for the application and issuance of CAI. For the BOI, the application for the CAI is filed manually onsite with the BOI Incentives Administration Service. The documentary requirements are as follows:
- Filled-up, signed, and duly-notarized application form;
- Proforma Invoice or Quotation from supplier listing the items to be imported; and
- Accomplished Attachments A and B.
Filing of an application with the BOI requires the payment of the filing fee of PhP 1,500.00.
Q11. What documents are required upon actual importation?
The issuance of the CAI by the BOI requires the submission of a performance bond or bank/shareholders guarantee equivalent to amount of duty/tax and duty to be exempted valid for one (1) year that must be renewed/extended every year until the RBE meets the conditions that warrant its lifting. There is also an issuance fee equivalent to 1/2 of 1% of the exempt amount, not less than PhP 300.00 but not to exceed PhP 15,000.00
Q12. Is there any licensing fee or administrative charge? If so, what is the amount of the fee or charge?
For BOI, aside from the CAI issued, the RBE must secure a Tax Exemption Indorsement (TEI) from the Department of Finance (DOF). The RBE must submit both the CAI and CNLA as part of the documentary requirements for securing the TEI. The TEI and CAI, as well as the documents and information required in accordance with Philippine customs procedures by virtue of Republic Act No. 10863, s. 2016 or the Customs Modernization and Tariff Act must be presented to the Bureau of Customs upon actual importation so that the imported items would be duty/tax and duty exempt.
Please refer to https://boi.gov.ph for applicable forms.
Q13. Is there any deposit or advance payment requirement associated with the issue of licences? If so, state the amount or rate, whether it is refundable, the period of retention and the purpose of the requirement.
Conditions of Licensing
Q14. What is the period of validity of a licence? Can the validity of a licence be extended? How?
For BOI, aside from the CAI issued, the RBE must secure a Tax Exemption Indorsement (TEI) from the Department of Finance (DOF). The RBE must submit both the CAI and CNLA as part of the documentary requirements for securing the TEI. The TEI and CAI, as well as the documents and information required in accordance with Philippine customs procedures by virtue of Republic Act No. 10863, s. 2016 or the Customs Modernization and Tariff Act must be presented to the Bureau of Customs upon actual importation so that the imported items would be duty/tax and duty exempt.
Please refer to https://boi.gov.ph for applicable forms.
Q15. Is there any penalty for the non-utilization of a licence or a portion of a licence?
There is no penalty for the non-utilization of the CAI.
Q16. Are licences transferable between importers? If so, are any limitations or conditions attached to such transfer?
The CAI is non-transferrable between and among importers.
Q17. Are any other conditions attached to the issue of a licence? a) for products subject to quantitative restriction? b) for products not subject to quantitative restriction?
There are no other conditions attached to the issuance of the CAI apart from the conditions specified above.
Other Procedural Requirements
Q18. Are there any other administrative procedures, apart from import licensing and similar administrative procedures, required prior to importation?
There are no other administrative procedures required prior to importation of capital equipment, raw materials, spare parts, and accessories duty/tax and duty free.
Q19. Is foreign exchange automatically provided by the banking authorities for goods to be imported? Is a licence required as a condition to obtaining foreign exchange? Is foreign exchange always available to cover licences issued? What formalities must be fulfilled for obtaining the foreign exchange?
Not applicable.