Innovators who are targeting to introduce their products and services to the commercial market may now avail of fiscal incentives from the Board of Investments (BOI).
Projects that will generate patented technologies may secure tax breaks from the BOI, as such activities are now included in the government’s Investments Priorities Plan (IPP). Under the BOI Memorandum Circular 2021-001, the commercialization of uncommercialized patents was listed as one of the investment areas that can enjoy incentives.
Based on the circular, uncommercialized patents refer to inventions, utility models and industrial designs granted letters patent or certificates of registration by the Intellectual Property Office of the Philippines (IPOPHL) but have yet to make economic gains from the innovation.
Prior to registering with the BOI, applicants must submit a certified true copy of the letters patent for inventions or certificates of registration for utility models and industrial designs. Likewise, the applicant should file an affidavit that the innovation to be filed has no prior commercialization.
Further, the applicant must secure a certificate from the IPOPHL proving the product or service has been posted in the IP depot for possible introduction to the market.
Upon approval, the project may get up to 6 years of income tax holiday and duty exemption on imported capital equipment, spare parts and accessories. Aside from these incentives, it will get exemption from wharfage dues; tax break on breeding stocks and genetic materials; tax credits on imported raw materials; among others.
Including the commercialization of new products and services in the IPP is seen to improve the government’s program to develop the IP environment in the Philippines.
IPOPHL Director General Rowel S. Barba on Sunday said the addition could propel the country in the Global Innovation Index (GII). The Philippines jumped to 50th out of 131 economies in the 2020 edition of the GII to pick up from its 54th placing in the 2019 cycle.
“The move will surely reinvigorate filings activity, help the Philippines climb higher in the GII and fulfill our goal to transition to a knowledge-based economy,” Barba said.
Barba said the inclusion of IP activities in the IPP can be attributed to the memorandum of agreement (MOA) signed in 2019 between the IPOPHL and the BOI. The MOA was reached to work on the grant of incentives to investments made in the IP sector.
Aside from the commercialization of uncommercialized patents, IP activities covered by the IPP include the publication of original books and the putting up of business incubators.
“We will continue work in adding more IP-generating activities in the next IPPs,” Barba said. “We hope we can succeed so we can drive more socially relevant and industrially useful IP products and processes into the market.”