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Li Republic of the Philippines DEPARTMENT OF FINANCE Manila

DEPARTMENT ORDER NO.. 65-94

RULES AND REGULATIONS TO IMPLEMENT THE DUTY AND TAX INCENTIVES PROVISIONS UNDER R.A. 7686, OTHERWISE KNOWN AS THE DUAL SYSTEM ACT OF 1994. TRAINING

of and 18 Section 9 the provisions of Pursuant to following rules and regulations are hereby the 7686, R_A. promulgated: - This set of guidelines shall govern the 1. SCOPE SECTION of tax and duty incentives of all public and private availment agricultural, centers and institution/training educational and business establishments duly accredited by the industrial authority to participate in the Dual Training appropriate System. these Rules, For purposes of DEFINITIONS SECTION 2. terms used herein shall be construed to have the following the meanings: R.A_ 7686 otherwise - refers to (a) "Act" the Dual Training System Act of 1994-

known

as

- refers to the government Authority" "Appropriate (b) entity-in-charge of formal technical and vocational educational training. "Dual training system" - refers to an instructional (c) system of technical and vocational education and delivery training that combines in-plant training and in-school training and designed collaboratively plan on a training based system educational accredited dual implemented by an system and accredited dual center institution/training agricultural, industrial and business establishments with prior notice and advise to the local government unit concerned. Under this system, said establishments and the educational institution share the responsibility of providing the trainee with the best possible job qualifications, the former essentially through practical training and the latter by securing an adequate level of specific general occupation-related theoretical instruction. The word "dual" refers to the two parties providing instruction; concept "system" means that the two instructing parties do the not operate independently of one another, but rather coordinate their efforts.

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"Trainee" - refers to person qualified to undergo the (d) dual training system for the purpose of acquiring and developing job qualifications-

(e) "Accredited Dual Training System Educational Institution/Training Center" - refers to a public or private institution duly recognized and authorized by the appropriate authority, in coordination with the business and industry, to participate in the dual training system. "Establishments" refer to enterprises and/or (f) services of agricultural, industrial or business establishments. (g) "Accredited Dual Training System Agricultural, Industrial and Business Establishments" - hereinafter referred to as agricultural, industrial and business establishments, refer to a sole proprietorship, partnership, corporation or cooperative which is duly recognized and authorized by the appropriate authority to participate in the dual training system educational institution.

SECTION 3_ TAX AND DUTY INCENTIVES - (a) Application for tax incentives under Section 9 and 18 of this Act, i_e_, allowable expenses, donations, contributions, bequests, subsidies, or financial aids, which may be made for the operation of the system shall be filed with the Bureau of Internal Revenue together the with certification/recommendation of the appropriate authority, subject to such conditions as provided for under the Act and the National Internal Revenue Code, as amended. (b) For the tax and duty-free entry of imported essential equipment, apparatus and materials by accredited dual training private educational institution under section 18 of the Act, the following requirements are prescribed: (1)

Application for exemption shall be filed with the Revenue Office, Department of Finance, Manila, duly signed by the Head of the accredited dual training private educational institution or his authorized representative.

(2)

The following import documents shall be attached to the application:

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(i)

(ii)

(iii)

Bill of lading, airway bill, parcel post/notice and other shipping documents; and Commercial and

invoice and packing list;

Other relevant documents concerning the shipment-

(3)

A Certification from the appropriate authority that the importer is an accredited dual training private educational institution, together with a recommendation that the importation/s is/are necessary in connection with the dual training system;

(4)

Affidavit/Statement under oath executed by the Applicant stating, among others, that the imported articles are essential and will be used actually, directly and exclusively in connection with the dual training system;

(5)

Copy of the Charter, or Certificate of Registration of the institution with the SEC or other evidence of the character of the institution; and

(6)

Certification from the Department of Trade and Industry or appropriate government agency that the articles to be imported are not available locally in sufficient quantity of comparable quality at reasonable prices.

SECTION 4_ Taxes and duties pertaining to the importation of accredited government and dual training educational institution are deemed automatically appropriated, subject to the documentary requirements enumerated under the preceding section. SECTION 5. Articles entered under this Act may not be sold, transferred or otherwise disposed of in any manner without the prior approval of the Department of Finance. SECTION 6_ MARKING - Articles entered tax and duty free under this Act shall be marked "TAY. AND DUTY FREE UNDER R_A. 7686" in

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a conspicuous place as the nature of the importation will permit.

SECTION 7_ INSPECTION - The Department of Finance may conduct such inspection as may be necessary before or after approval of any application for tax and duty incentives under this Act, to ensure compliance with the requirements herein. SECTION 8_ VIOLATION. Any violation of the provision of these Rules and Regulations shall be subject to the penalties and sanctions prescribed under R.A. 7686 and other applicable laws. SECTION 9. EFFECTIVITY. These rules and regulations shall take effect fifteen (15) days following the completion of their publication in the Official Gazette or in a newspaper of general circulation.

O F_ DE OC. Secretary Manila, 03 June 1994