BIR requires 2% withholding tax on electricity spot market payments
Market operator IEMOP must deduct the tax before paying generators and other participants, then remit it through the BIR’s electronic system.
The Philippines’ Bureau of Internal Revenue (BIR) has directed the Independent Electricity Market Operator of the Philippines (IEMOP) to deduct a 2% creditable withholding tax on payments arising from wholesale electricity spot market transactions. The operator is responsible for accounting for the deductions and transferring them to the government.
Revenue Regulations No. 5-2026 requires IEMOP to calculate the deduction on gross remittances before it pays generation companies and other market participants. Withheld amounts must be remitted through the BIR’s Electronic Filing and Payment System.
IEMOP must provide every payee with BIR Form No. 2307. After each taxable quarter, it must also submit a payee list in alphabetical order and a certified list identifying electricity buyers.
BIR Commissioner Charlito Mendoza said assigning the duty to IEMOP would make tax tracking more accountable and help ensure collections reach the government. The regulations become effective 15 days following publication in either the Official Gazette or the BIR website.
