- The BIR removed VAT from allowable electricity system loss charges within the ERC-approved cap, treating them as government-mandated pass-through costs excluded from gross sales for VAT purposes.
- The exemption applies only to future billings once ERC Resolution No. 26, Series of 2026 takes effect; it is not retroactive to past charges.
- The excluded system loss charge is not subject to output VAT or creditable withholding on VAT.
- Power sector entities must separately itemize the allowable system loss charge on bills/invoices to qualify for the VAT exclusion.
- The move follows earlier BIR guidance exempting other government-mandated charges, including the Lifeline Subsidy and Green Energy Auction Allowance.
Source: pia.gov.ph
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 Eases Deadlines for New CWT Invoicing Rules
- Philippines BIR New Invoice Requirement on Withholding Tax Line Items
- Philippines Introduces Mandatory Accreditation for E-Invoicing Service Providers
- Philippines BIR Issues New Accreditation Rules for E-Invoicing Service Providers
- BIR issues RMC 110-2026: accreditation rules for e-invoicing service providers
