BIR Ruling No. 438-2022

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNALREVENUE DEPARTMENT OF FINANCE

Quezon City

Republic ActRA) No.9513 BIR Ruling No.668-2019

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Km. 13, North National Highway, Sta. Lourdes Puerto Princesa City, Palawan, Philippines 5300 SABANG RENEWABLE ENERGY CORPORATION

Attention: WALDEN H.TANTUICO President

Gentlemen:

construction and installation of its plant facilities pursuant to Republic Act (RA) No. 9513, PV, Battery, IDiesel and Micro Grid (QTP), is entitled to zero percent (0%) value-added tax (VAT) on its purchase of local supply of goods, properties and services needed for the development, Energy Corporation for confirmation that being a Renewable Energy (RE Developer for Solar otherwise known as the "Renewable Energy Act of 2008." This refers to your letter dated August 19, 2019 requesting on behalf of Sabang Renewable

effect on June 10, 2014; and that the DOE issued a Confirmation of Commerciality No. SCC- Sabang Hybrid (Solar PV, Battery, Diesel, and Micro-Grid Qualified Third Party Project, approving the conversion of the SESC No. development/commercial stage, and, subsequently, delineating the production area under the SESC. laws of the Philippines, duly registered with the Securities and Exchange Commission (SEC) with Energy (DOE) under Certificate of Registration No. RE Developef of Solar Energy Resources located in Barangay Cabayugan, Puerto Princesa City, Palawan, which is covered by Solar Energy Service Contract (SESC) No. IdentificationNumber (TIN) Company Registration No. Documents submitted show that Sabang Renewable Energy Corporation with Taxpayer's [dated January 15, 2018 confirming the Declaration of Commerciality (DOC) of ; that it is likewise registered with the Department of is a corporation organized and existing under the from pre-development stage to dated June 10,2014 as that took

Please be informed that Section 15 of RA No.9513 provides that:

to and to the extent of the RE component, for both power and non-power applications, as duly certified by the DOE, in consultation with the BOI, shall be entitled to the following incentives: Developers of renewable energy facilities, including hybrid systems, in proportion "SEC 15.Incentives for Renewable Energy Projects and Activities.-RE

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generated from renewable sources of energy such as, but not limited to, biomass, solan, wind, hydropower, geothermal, ocean energy and other emerging energy sources using technologies such as fuel cells and hydrogen fuels, shall be subject (g) Zero Percent Value-Added Tax Rate. - The(sale of fuel or power

Revenue Code (NIRC) of 1997, as amended by Republic Act No.9337. to zero percent (0%) value-added tax (VAT), pursuant to the National Internal

purchases of local supply of goods, properties and services needed for the development, construction and installation of its plant facilities. All RE Developers shall be entitled to zero-rated value added tax on its

but not limited to the services performed by subcontractors and/or contractors. developing renewable energy sources up to its conversion into power, including This provision shall also apply to the whole process of exploring and

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1997, as amended, provides that: In relation thereto, Section 108 (B) (7) of the National Internal Revenue Code (NIRC) of

Properties. "Sec. 108. Value-added Tax on Sale of Services and Use or Lease of

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to zero percent (0%) rate: Services performed in the Philippines by VAT registered persons shall be subject (B) Transactions Subject to Zero Percent (0%) Rate. - The following

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suchas, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy, and other emerging energy sources using technologies such as fuel cells and hydrogen fuels. (7) Sale of power or fuel generated through renewable sources of energy

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limited to, biomass, solar, wind, hydropower, geothermal, ocean energy, and other emerging energy sources using technologies such as fuel cells and hydrogen fuels, shall be subject to zero amended, the sale of power or fuel generated from renewable sources of energy such as, but not percent (O%) VAT. Clearly, under RA No. 9513 in relation to Section 108 (B) (7) of the NIRC of 1997, as

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by RE Developers are subject to zero percent (0%) VAT provided that they are needed for the development, construction and installation of their power plant facilities. on their local purchases of goods and services needed for the development, construction and installation Of their power plant facilities. Under said law, the local purchases of goods and services AlsoRA No. 9513 intended to exclude RE Developers from the coverage of the 12% VAT

purchases of goods and services that will be used in its development, construction and installation of power plant facilities in Barangay Cabayugan, Puerto Princesa City, Palawan. Corporationit being a DOE-certified RE Developer, should not pass on 12% VAT to the latter's Thus the suppliers/sellers of goods and services of Sabang Renewable Energy

post audit verification by the BIR whether the purchased goods/services were indeed utilized in the development, construction and installation of its power plant facilities in Barangay Cabayugan, shall be limited only to Sabang Renewable Energy Corporation's local purchases that will be used in its development, construction and installation of its power plant facilities located in Barangay Cabayugan,Puerto Princesa, Palawan. Likewise, the grant of VAT zero-rating shall be subject to Puerto Princesa City, Palawan. It must be emphasized, however, that the 0% VAT on local purchases of goods and services

upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered n ull and void. This ruling is being issued on the basis of the foregoing facts as represented. However, if

Very truly yours,

LARRYM. BARCELO Assistant Commissioner /00010057 /Legal Service

K-I1- RLI