Summary
RMC No. 11-2025 circularizes RA No. 12120, the Philippine Natural Gas Industry Development Act. It covers incentive evaluation for natural gas facilities and a VAT exemption on certain natural gas and power transactions.
Key points
- Incentive evaluation. Philippine Downstream Natural Gas Industry Facilities certified by the Department of Energy undergo evaluation for inclusion in the Strategic Investment Priority Plan. Entitlement is subject to the incentives under Title XIII (Tax Incentives) of the NIRC, as amended by RA No. 11534.
- VAT exemption. The purchase and sale of indigenous natural gas, aggregated gas, and power generated from them are exempt from VAT. For aggregated gas, the exemption covers only the amount of indigenous natural gas attributed to it.
- Gas transactions covered. This includes purchase and sale of indigenous natural gas and aggregated gas by an aggregator, reseller, supplier, a person authorized by the Energy Regulatory Commission to operate electricity generation facilities, or an end-user.
- Electricity transactions covered. This includes purchase and sale of electricity or ancillary services from a generation facility using indigenous natural gas or aggregated gas, by persons authorized to operate generation facilities, sell, broker, market or aggregate electricity, consolidate end-user demand, distribute electricity, or procure or provide ancillary services.
- All modes of sale. The exemption applies to supply agreements, duly authorized markets such as the wholesale electricity spot market or ancillary reserves market, financial gas contracts, Natural Gas Sales and Purchase Agreement, and other modes.
Who is affected
- Aggregators, resellers and suppliers of natural gas
- Persons authorized to operate electricity generation facilities
- End-users
- Certified downstream natural gas facilities
Deadlines and effectivity
- Issued February 7, 2025
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
Copies of BIR issuances are hosted here for reference. For the official version, check bir.gov.ph. Summaries by Tax Resources PH are not a substitute for the full text or professional advice.