RMC No. 06-2015: Publishes the full text of Executive Order No. 173 entitled “Reduction and Condonation of Real Property Taxes and Interest/Penalties Assessed on the Power Generation Facilities of Independent Power Producers under Build-Operate-Transfer Contracts with Government-Owned and/or -Controlled Corporations”

Key points

1. Reduced real property tax. Real property tax liabilities for all years up to 2014 on property, machinery and equipment actually and directly used by IPPs to produce electricity under BOT contracts with GOCCs are reduced. This covers special levies for the Special Education Fund, and applies whether the contracts are called Power Purchase Agreements, Energy Conversion Agreements or other agreements.
2. How the amount is set. The reduced amount equals the tax due computed at an assessment level of 15% of the fair market value of the property, machinery and equipment, depreciated at 2% per annum, less amounts already paid by the IPPs.
3. Condonation. All fines, penalties and interest on the deficiency real property tax liabilities are condoned, and the IPPs are relieved from paying them.

Who is affected

• Independent Power Producers under Build-Operate-Transfer contracts with GOCCs

Deadlines and effectivity

• Covers real property tax liabilities for all years up to 2014