Oliver 13 0 0 3 min to read

CTA gives a renewable energy company a P10-million tax credit

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The Court of Tax Appeals (CTA) has ruled that the Philippine Geothermal Production Co. Inc. (PGPCI) is entitled to a tax credit of PHP10.02 million, which is the amount of value-added tax (VAT) that was paid in excess of 2015.

In a 27-page decision written by Associate Justice Erlinda Uy and dated January 9, the tax court en banc upheld the 2020 decision of the tax court second division and said that “it finds no reversible error committed by the court, in the division, that would warrant the modification, nor reversal.”

Both the Bureau of Internal Revenue (BIR) and PGPI’s separate petitions for review of the tax court’s second division’s decision to give PHP10.02 million in tax credits to the company were turned down by the en banc decision.

PGPCI first filed its application for a tax refund or credit for PHP25.5 million worth of unused input taxes in 2017.

Later, the BIR decided to give the company PHP3.5 million in tax credit, which made the company take the case to the tax court.

The second division of the CTA decided to give the company a smaller tax credit of PHP10.02 million. They also took away PHP3.5 million in tax credit that the BIR had already given to the company.

The CTA said that the court’s second division made the right decision when it said that PGPCI could still get tax breaks under RA 9513, or the Renewable Energy Act, even though the Department of Energy’s Certificate of Endorsement said that it was a good business that could get the tax break.

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