Summary
RMC No. 66-2013 circularizes the revocation of BIR Ruling No. 11-07 dated 31 May 2007, which granted VAT exemption to the National Transmission Corporation (TransCo), in light of RMC No. 11-2012.
Key points
- What is revoked. BIR Ruling No. 11-07 confirmed TransCo was not subject to VAT on disposal of sub-transmission assets. It is revoked insofar as it is inconsistent with RMC No. 11-2012, which says PSALM’s sale of NPC generation assets and other real properties to winning bidders is subject to VAT.
- Basis for revocation. Section 6 of Republic Act No. 9337, enacted on July 1, 2005, amended Section 108 and placed the electric power industry in the VAT system. RR No. 16-2005, as amended by RR No. 4-2007, subjected sale of real properties used in business to VAT. Thus PSALM’s sale or disposition of sub-transmission assets is subject to VAT.
- Audit. The Large Taxpayers Service must audit and investigate to determine the taxes due on the transaction.
Who is affected
- National Transmission Corporation (TransCo)
- Power Sector Assets and Liabilities Management Corporation (PSALM)
- Large Taxpayers Service
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
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