- The BIR said the Lifeline Subsidy and Green Energy Auction Allowance are exempt from VAT and withholding tax because they are pass-through collections, not utility income.
- Revenue Memorandum Circular No. 60-2026 updates earlier guidance and removes these charges from output VAT and creditable withholding tax.
- Distribution utilities and electric cooperatives only collect and remit these funds for government programs, including support for low-income households and renewable energy.
- BIR said this is not a new tax exemption, but a clarification meant to align tax treatment with the nature of the charges and help lower electricity costs.
- The move supports the Ease of Paying Taxes Act and the government’s goal of protecting consumers while promoting clean energy.
Source: manilastandard.net
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
Latest Posts in "Philippines"
- Philippines Petition Seeks to Abolish VAT on Digital Books and Content
- BIR Exempts Two Power Charges from VAT to Cut Electricity Costs
- Philippines Clarifies VAT Rules for Non-Resident Digital Service Providers
- BIR Bars Foreign Tech Giants from Using Tax Treaties to Dodge VAT
- Expanded VAT Exemptions Expected to Boost Demand for Essential Medicines
