CTA affirms P10-M tax credit for renewable energy firm

By Benjamin Pulta

January 12 2023, 5:02 pm

MANILA -- The Court of Tax Appeals (CTA) has affirmed the issuance of a tax credit of PHP10.02 million in favor of sustainable energy firm, Philippine Geothermal Production Co. Inc. (PGPCI), representing excess value-added tax (VAT) for 2015.

In its 27-page decision by Associate Justice Erlinda Uy dated Jan. 9, the tax court en banc affirmed the 2020 decision of the tax court second division adding that "it finds no reversible error committed by the court, in division, that would warrant the modification, nor reversal,".

The en banc ruling dismisses both the Bureau of Internal Revenue (BIR) and PGPI's separate petitions for review questioning the tax court second division's ruling granting PHP10.02 million in tax credits to the firm.

PGPCI in 2017 originally filed its application claiming tax refund/ credit for its unutilized input taxes for PHP25.5 million.

The BIR would later rule to grant and allow the firm PHP3.5 million in tax credit, prompting the firm to take the case to the tax court.

The CTA second division ruled to allow a reduced tax credit of PHP10.02 million, and deducted PHP3.5 million in tax credit previously allowed the firm by the BIR.

The CTA en banc said the court second division was correct in ruling PGPCI would still be able to avail of tax incentives under RA 9513, or the Renewable Energy Act, regardless of the Certificate of Endorsement from the Department of Energy that it is an enterprise in good standing and may avail of the incentive. (PNA)