RR 7-2022

Revenue Regulations (RR) No. 7-2022, issued June 30, 2022, sets out the policies and guidelines for availing of tax incentives under the Renewable Energy Act of 2008. RE developers and manufacturers, fabricators, and suppliers of locally-produced RE equipment must first register with the DOE (through the REMB), secure the required DOE certifications/accreditations, and register with the BOI; the BOI's Certificate of Income Tax Holiday (ITH) Entitlement must be attached to the annual ITR or the ITH may be forfeited. The covered incentives are: Income Tax Holiday; NOLCO (losses in the first three years of commercial operation carried over for the next seven consecutive taxable years); a 10% corporate income tax rate after the ITH (with savings passed on to end-users as lower power rates); accelerated depreciation (which forecloses ITH eligibility); and zero percent VAT on sales of renewable power/fuel, ancillary services, and certain local purchases by RE developers. Local suppliers should not pass on the 12% VAT on such purchases and shall require a copy of the RE developer's BOI and DOE Registration.