BIR mandates 2% withholding tax remittance on electricity spot market sales

The Bureau of Internal Revenue (BIR) has ordered the Independent Electricity Market Operator of the Philippines (IEMOP) to withhold, account for, and remit taxes for electricity transactions in the wholesale electricity spot market (WESM) to ensure that they are properly recorded.

Under Revenue Regulations (RR) No. 5-2026, IEMOP must deduct the 2% creditable withholding tax from gross remittances before paying generation companies and market participants.

“We want to make sure that taxes from electricity transactions actually reach the government and are properly recorded. By placing the withholding responsibility with IEMOP, we have a clearer and more accountable system for tracking the taxes withheld and remitted from transactions in the electricity spot market,” said BIR Commissioner Charlito Mendoza in a statement.

The new policy requires the IEMOP to remit withheld taxes using the BIR’s Electronic Filing and Payment System.

The IEMOP must also issue BIR Form No. 2307 to all payees. It is also mandated to submit the alphabetical list of payees and a duly certified list of electricity buyers after each taxable quarter.

The RR No. 5-2026 will take effect 15 days after its publication in the Official Gazette or on BIR’s official website. –NB, GMA News