boi - allowable deduction by industry

8/12/2019 BOI - Allowable Deduction by Industry

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CLARK FREEPORT ZONE Investors

Guide - 03ALLOWABLE E!CTION" B# IN!"TR#

Gross In$o%e E&rned 'GIE( shall refer to gross sales or grossrevenues derived from business activities within the subject Ecozone or Freeport,

net of sales discounts, sales returns and allowances minus cost of sales or direct

costs but before any deduction for administrative, marketing, selling, and/or

operating expenses or incidental losses during a given taxable year. rovided,

that, in the case of financial enterprises within Freeports, gross income shall

include interest income, gains from sales, and other income, net of costs of

funds.

!nly the following cost of sales/direct cost shall be allowed as deductions for

purposes of calculating the "#E earned for the following Ecozone or Freeport

Enterprises/industries, to wit$

TRAING ENTERPRI"E"

%osts of &ales 'beginning inventory plus purchases, minus

ending inventory of goods(.

)AN!FACT!RING ENTERPRI"E"

)irect salaries, wages, or labor expenses, inclusive of training

directly related to the registered activity*

roduction supervision salaries

+aw materials used in the manufacture of products*

)ecrease in goods in process account 'intermediate goods(*

ote$ -llowable )eductions by #ndustry was obtained from )ept. of Finance ')!F( )ept. !rder o. 01

2 +34E& -) +E"34-5#!& 5! #64E6E5 +.-. 7800 2


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Guide - 03 )ecrease in finished goods account*

&upplies and fuels used in production*

)epreciation of machinery and e9uipment used in production,

and of that portion of the building owned or constructed by the

registered enterprise that is used exclusively in the production of

goods*

+ent and utility charges associated with building, e9uipment and

warehouses used in production* and

Financing charges associated with fixed assets used in

production, the amount of which was not previously capitalized.

"ER*ICE ENTERPRI"E"

)irect salaries, wages, or labor expenses, inclusive of training

directly related to the registered activity*

&ervice supervision salaries*

)irect materials, supplied used*

)epreciation of machinery, e9uipment used in the rendition of

registered services, and of that portion of the building owned or

constructed by the registered enterprise that is used exclusively

in the rendition of the registered service*

+ent and utility charges for buildings and capital e9uipment

used in the rendition of registered services*

Financing charges associated with fixed assets used in theregistered service business the amount of which was not

previously capitalized.

FINANCIAL IN"TIT!TION"

ote$ -llowable )eductions by #ndustry was obtained from )ept. of Finance ')!F( )ept. !rder o. 01

2 +34E& -) +E"34-5#!& 5! #64E6E5 +.-. 7800 2


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Guide - 03 one

NOTE+

For purposes of implementing the :; tax on "ross #ncome Earned, in lieu of

national and local taxes, granted to E

boi - allowable deduction by industry

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