BIR Ruling No. 99-2020

REPUBLICOF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

RA No. 9513, RA No. 9367

RR No. 16-05 BIR Ruling No. 078-10

VAT-005-2020

LEYTE AGRI CORP JAN 2 4 2020

AA Compound Brgy. Ipil Ormoc City, Leyte

Attention: Ruben A. Villanueva

VP/COO

Gentlemen:

This refers to your letter dated July 25, 2013, which was duly endorsed to this Office by the Department of Energy (DOE) on August 14, 2013, relative to your request for clarification on whether or not the sale by Leyte Agri Corp. of Bioethanol to Oil

Industry Participants is subject to zero percent (0%) value-added tax (VAT).

Documents submitted show that Leyte Agri Corp., with Tax Identification No.

(TIN) , is a domestic corporation duly organized under the Philippine

laws, with office address at AA Compound, Brgy. Ipil, Ormoc City, Leyte; that it is

registered with the Securities and Exchange Commission (SEC) bearing SEC

Certificate of Registration No. and that it is also accredited by the

Department of Energy (DOE) as a manufacturer of bioethanol with Certificate of

Accreditation No. DOE-JAO-2014-BE002 effective November 19, 2014.

Based on the above representations, you now inquire on whether or not its sale

of Bioethanol to Oil Industry Participants is subject to zero percent (0%) VAT.

In reply, please be informed that pursuant to Section 15 of Republic Act (RA)

No. 9513 (Renewable Energy Act of 2008), as implemented by Section 4.108-5(7)

of RR No. 16-05, as amended, the sale of power or fuel is entitled to zero percent (0%)

VAT provided that the power or fuel is generated through renewable sources of energy

such as, but not limited to, biomass, solar, wind, hydropower, geothermal and steam,

ocean energy, and other emerging sources using technologies such as fuel cells and

hydrogen fuels. The aforesaid Section states:

"SEC. 4.108-5. Zero-Rated Sale of Services.

b)Transactions Subject to Zero Percent (0%) VAT Rate.

-- The following services performed in the Philippines by a

VAT-registered person shall be subject to zero percent (0%) VAT

rate:

+Pag2 of 2 Leyte Agri Corp./Request for VAT Zero Rating VAT-005-2020 JAN 2 4 2020

XXX XXX XXX

sources of energy such as, but not limited to, biomass, solar, wind. hydropower, geothermal and steam, ocean energy, and other emerging sources using technologies such as fuel cells and hydrogen fuels; Provided, however, that zero-rating shall apply strictly to the sale of power or fuel generated through renewable sources of energy. or operation of plants generating said power. and shall not extend to the sale of services related to the maintenance (7) Sale of power or fuel generated through renewable

XXX XXX XXX"

which is a renewable source of energy, the sale thereof by Leyte Agri Corp. to Oil as referring to ethanol (C2H30H) produced from feedback and other biomass (Section Industry Participants shall be subject to zero percent (0%) VAT in accordance with RA No. 9513, as implemented by RR No. 16-05. (BIR Ruling No. 078-10 dated September 3[c], RA No. 9367). Accordingly, since Bioethanol Fuel is generated from biomass 23, 2010) In relation thereto, RA No. 9367 (Biofuels Act of 2006) defines Bioethanol Fuel

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

Very truly yours,

Macwa

Commissioner of Internal Revenue CAESAR R.DULAY

032361

K-1-JHB