EDC PR 2016

f.
g.
h.
i.
j.
k.
On June 29, 2011, the BOI approved the ITH registration of the 86 MW Burgos Wind Farm
under the Renewable Energy Act of 2008 (RA 9513). On June 3, 2014, the Company received
a legal service letter from BOI granting the upward amendment of registered capacity of the
Burgos Wind Farm from 86 MW to 150 MW effective for 7-year period beginning in
December 2015 or date of commissioning, whichever is earlier.
On November 13, 2015, GCGI was granted with an ITH incentive by the BOI covering its
112.5 MW Tongonan Geothermal Power Plant, effective for 7-year period beginning in
April 2015. Only revenues derived from power generated (i.e., 36.79 MW or the capacity in
excess of the 75.71 MW, whichever is lower) and sold to the grid, other entities and/or
communities shall be entitled to ITH.
On June 16, 2015, the Parent Company was granted with an ITH incentive by the BOI
covering its 4.16 MW Burgos Solar Plant - Phase 1, effective for 7-year period beginning in
December 2015.
On December 3, 2015, the Parent Company was granted with an ITH incentive by the BOI
covering its 2.66 MW Burgos Solar Plant - Phase 2, effective for 7-year period beginning in
June 2015.
On December 11, 2015, GCGI was granted with an ITH incentive by the BOI covering its
192.5-MW Palinpinon Geothermal Power Plant, effective for 7-year period beginning in
February 2014. Only revenues derived from power generated (i.e., 39.66 MW or the capacity
in excess of the 152.84 MW, whichever is lower) and sold to the grid, other entities and/or
communities shall be entitled to ITH.
On December 18, 2008, the BIR issued Revenue Regulations (RR) No. 16-2008 which
implemented the provisions of Section 34(L) of the Tax Code, as amended by Section 3 of
R.A. No. 9504, which allows individuals and corporations who are subject to the 30% RCIT
rate to adopt the Optional Standard Deduction (OSD) in computing their taxable income.
Under RR No. 16-2008, corporations may claim OSD equivalent to 40% of gross income,
excluding passive income subjected to final tax, in lieu of the itemized deductions. A
corporate taxpayer who elected to avail of the OSD shall signify such in the income tax return
(ITR). Otherwise, it shall be considered as having availed of the itemized deductions allowed
under Section 34 of the National Internal Revenue Code. Pursuant to Section 3 of
RR No. 02-2010 dated February 18, 2010, the election to claim the OSD or the itemized
deduction for the taxable year must be signified by checking the appropriate box in the ITR
filed for the first quarter of the taxable year adopted by the taxpayer. Once the election is
made, the same type of deduction must be consistently applied for all succeeding quarter
returns and in the final ITR for the taxable year. Any taxpayer who is required but fails to file
the quarterly ITR for the first quarter shall be considered as having availed of the itemized
deductions option for the taxable year.
For the years ended December 31, 2016, 2015 and 2014, the Company computed its income
tax based on itemized deductions for its income subject to either 10% or 30% income tax rate.
EDC, EBWPC and BGI does not recognize deferred tax assets and deferred tax liabilities on
temporary differences that are expected to reverse during the ITH period.
262
I Energy Development Corporation Performance Report 2016