RR No. 2-2026 - 8box Solutions Inc.

REVENUE REGULATIONS NO. 2-2026 issued on March 17, 2026 prescribes the guidelines in the availment of the fiscal incentives under Section 38 of Republic Act (RA) No. 12120 (Philippine Natural Gas Industry Development Act).

The fiscal incentives provided under Section 38 of RA No. 12120 are as follows:

a. VALUE-ADDED TAX (VAT) EXEMPTION. -The purchase and sale of indigenous natural gas, aggregated gas and power generated by generation facilities using indigenous natural gas and aggregated gas shall be exempt from VAT. Provided, that the exemption from VAT for aggregated gas is only to the extent of the amount of indigenous natural gas attributed to be in the aggregated gas. This includes:

i. purchase and sale of indigenous natural gas and aggregated gas by an aggregator, reseller, supplier, person authorized by the Energy Regulatory Commission (ERC) to operate facilities used in the generation of electricity, or an end-user; and

ii. purchase and sale of electricity or ancillary services produced by a generation facility using indigenous natural gas and/or aggregated gas by a person authorized to:

a. operate facilities used in the generation of electricity or ancillary services;
b. sell, broker, market or aggregate electricity to end-users;
c. consolidate electric power demand of end-users for the purpose of purchasing and reselling electricity on a group basis;
d. engage in the distribution of electricity; or
e. procure or provide ancillary services.

These shall include all modes of purchase and sale, whether through a supply agreement: a duly authorized market such as, but not limited to, the wholesale electricity spot market or the ancillary reserves market, financial gas contracts, NGSPA; or through other modes.

b. INCENTIVES UNDER TITLE Xlll OF THE TAX CODE. – All Philippines Downstream Natural Gas Industry (PDNGI) Facilities, as certified by the Department of Energy (DOE), may avail of the tax incentives under Title XIII of the Tax Code, provided that they are included in the Strategic Investment Priority Plan (SIPP) and duly registered with the Board of Investments (BOl).

To qualify for VAT exemption, the following documents shall be attached to the Quarterly VAT Declaration (BIR Form No. 2550Q):

A. For Participants:

i. Endorsement from the DOE’s Oil Industry Management Bureau (OIMB) confirming that the Participant is engaged in the sale of Indigenous Natural Gas under Section 3(a)(i) hereof; and

ii. DOE-OIMB Certification indicating the volume and percentage of Indigenous Natural Gas sold by a Participant for the taxable quarter.

B. For Generation Facilities:

i. Endorsement from DOE’s Electric Power Industry Management Bureau (EPIMB) confirming that the Generation Facility is using Indigenous Natural Gas under Section 3(a)(ii) hereof; and

ii. DOE-EPIMB Certification on the power produced from Indigenous Natural Gas for the corresponding taxable quarter.

In both cases, a Certified True Copy of the DOE Permit shall be attached to the DOE Endorsement.

In preparing the Quarterly VAT Declaration. taxpayers shall indicate the legal basis of the VAT exemption availed of (i.e., Section 38 of R.A. No. 12120) on Field Item Number 14A of the Quarterly VAT Declaration.

The availment of incentives under Title XIII of the Tax Code shall be governed by the provisions of Title Xlll of the Tax Code and its Implementing Rules and Regulations.

Unless otherwise provided by law, the availment of fiscal incentives under Title XIII of the Tax Code shall be a disqualification on the availment of similar tax incentives provided under the RA No. 12120 and other special laws.