BIR Ruling [DA-252-03]

August 5, 2003 BIR RULING [DA-252-03] VAT Ruling Nos. 015-99, 022-99, 052-99, 067-99, 018-00; BIR Ruling Nos. DA-247-04-19-99, DA-632-11-10-99 and DA-209-04-04-00. Sec. 108 (B) (3); Section 10 of P.D. 938 R.A. 6395 Northern Mini Hydro Corporation 214 Ambuclao Road, Obulan Beckel, La Trinidad Benguet Province Attention: Mr. Jose Venancio P. Batiquin Managing Director Gentlemen : This refers to your letter dated April 3, 2003 requesting for confirmation of your opinion that the sale of electricity by Northern Mini Hydro Corporation ("NMHC") to the National Power Corporation ("NPC") is subject to VAT at zero rate pursuant to Section 108(B)(3) of the Tax Code of 1997. BACKGROUND NMHC is engaged in the business of developing potential sites for hydroelectric power in the Province of Benguet and Baguio City. It has been registered as such pursuant to Republic Act No. 7156, otherwise known as "An Act Granting Incentives to Mini-Hydroelectric Power Developers and For Other Purposes" and its implementing regulations as evidenced by its Certificate of Registration dated December 1, 1993. At present, NMHC is registered as a VAT taxpayer with the Bureau of Internal Revenue ("BIR") with TIN 001-946-904. NMHC is the lawful operator of certain Hydro Electric Plants situated at Sinakbat, Poblacion Bakun, Benguet and Bakun Central, Benguet, more particularly known as the Lower Labay and Upper Takbo Mini Hydro Power Plants and more generally known as the Bakun Mini Grid. On January 20, 1993, NMHC entered into an Electric Supply Agreement with the NPC for the purchase of uncommitted power and energy produced by the aforesaid hydroelectric plant which agreement was effective for a period of twenty-five (25) years from the date of signing. In support of your request, you submitted the following documents: 1. Articles of Incorporation of Northern Mini Hydro Corporation; 2. Copy of VAT Registration Certificate of Northern Mini Corporation; 3. Copy of the Electric Power Supply Agreement between NPC and NMHC; 4. Copy of the Certificate of Registration of NMHC from the Department of Energy; and 5. Copy of the Application of Certificate of Compliance (COC) filed with the Energy Regulatory Commission ("ERC"). TAXPAYER'S OPINION/POSITIONS I. RA No. 6395 otherwise known as the National Power Corporation (NPC) Charter provides that it shall be exempt from all taxes . Section 13 of Republic Act (RA) No. 6395, otherwise known as the NPC Charter, provides as follows: "The corporation shall be non-profit and shall devote all its returns from its capital investment as well as excess revenues from its operation, for expansion. To enable the corporation to pay its indebtedness and obligations in furtherance and effective implementation of the policy enunciated in Section one of this Act, the Corporation, including its subsidiaries is hereby declared exempt from the payment of ALL FORMS OF taxes, duties, fees, imposts as well as costs and service fees, including filing fees, appeal bonds, supersedeas bonds, in any court or administrative proceedings ." (emphasis supplied) The Supreme Court has already made a definitive statement upholding NPC's exemption from the payment of direct and indirect taxes in the case of Maceda vs. Macaraig, G.R. No. 88291, May 31, 1991 , thus: "The NPC is a non-profit public corporation created for the general good and welfare, wholly owned by the government of the Republic of the Philippines. From the very beginning of its corporate existence, the NPC enjoyed preferential tax treatment, to enable the Corporation to pay the indebtedness and obligation and in furtherance and effective implementation of the policy enunciated in the Section one of "Republic Act No. 6395" which provides: "Section 1. Declaration of Policy . Congress hereby declares that (1) the comprehensive development, utilization and conservation of Philippine water resources for all beneficial uses, including power generation, and (2) the total electrification of the Philippines through the development of power from all sources to heed the need of rural electrification are primary objectives of the nation which shall be pursued coordinately and supported by all instrumentalities and agencies of the government including its financial institutions. "From the changes made in the NPC charter, the intention to strengthen its preferential tax treatment is obvious. xxx xxx xxx It is noted that in the earlier law, R.A. No. 358 the exemption was worded in general terms, as to cover "all taxes, duties, fees, imposts, charges, etc. . ." However, the amendment under Republic Act No. 6395 enumerated the details covered by the exemptions. Subsequently, P.D. No. 380, made even more specific the details of the exemption of the NPC to cover, among others, both direct and indirect taxes on all petroleum products used in its operation. Presidential Decree No. 938 amended the tax exemption by simplifying the same law in general terms. It succinctly exempt NPC from "all form of taxes, duties, fees, imposts, as well as costs and service fees including filing fees, appeal bonds, supersedeas bonds in any court in administrative proceedings." The use of the phrase "all forms" of taxes demonstrate the intention of the law to give NPC all the tax exemptions it has been enjoying before. The rationale for this exemption is that being non-profit the NPC "shall devote all its returns from its capital investment as well as excess revenues from its operations, for expansion . . . xxx xxx xxx It is evident from the provisions of P.D. No. 938 that its purpose is to maintain the tax exemption of NPC from all forms of taxes including indirect taxes as provided for under R.A. No. 6395 and P.D. 380 if it is to attain its goals." II. NPC being tax exempt entity, the sale of electricity by NMHC to NPC are subject to VAT at zero rate . Since the National Power Corporation (NPC) is a tax exempt entity under a special law, NMHC's sales of electricity to NPC are subject to VAT at zero rate. In a memorandum to the Commissioner of Internal Revenue dated January 26, 1998, the then Hon. Secretary of Finance Robert F. De Ocampo, in the exercise of his power to review rulings issued by the BIR under Section 4 of the Tax Code of 1997, held that: aTCAcI "The Department has consistently held the view that NPC's purchase of electricity should be treated in the same manner as its purchase of petroleum products. This is in recognition of the broad and comprehensive tax exemption privilege granted to NPC by Congress. "The NPC Charter clearly provides for NPC's exemption from all taxes-direct and indirect. No less than the Supreme Court ruled that it has been the lawmakers intention that the NPC is completely exempt from all taxes. The Department of Justice and the Office of the Solicitor General have also issued opinions supporting the full tax exemption of the NPC. Even the BIR ruled that NPC is exempt from direct and indirect taxes. "xxx xxx xxx In view of the foregoing and using the power of review granted to the Secretary of Finance under Section 4 of Republic Act No. 8424, the DOF upholds the ruling of the Supreme Court that NPC is exempt under its charter and subsequent laws from all direct and indirect taxes on its purchases of petroleum products and electricity. Thus the purchases of NPC of electricity from independent power producers are subject to VAT at zero rate." III. The Court of Appeals in the Case of MIRANT (NAVOTAS II) CORPORATION (Southern Energy Navotas II Power, Inc. [formerly Hopewell Energy Philippines] Corporation) vs. COMMISSIONER OF INTERNAL REVENUE, CA-G.R. S.P. 64811, October 9, 2002, has pursued the same line of reasoning. The exemption of NPC is unquestioned, it necessarily lends to the conclusion that the latter's purchases of electricity will entitle its supplier to VAT zero rating . IV. The BIR has consequently held in the following BIR rulings involving the same factual and legal issues that sale of electricity to the NPC by an independent power producer is subject to 0% VAT: BIR Ruling [DA-247-99] dated April 19, 1999 and on April 4, 2000 BIR Ruling [DA-209-00) "the sale of electricity by Luzon Hydro Corporation to NPC is subject to zero percent (0%) VAT pursuant to Section 108(B)(3) of the Tax Code of 1997"; BIR Ruling [DA-632-99]dated November 10, 1999 "the sale of electricity by NMPC to NPC is subject to zero percent (0%) VAT pursuant to Section 198(B)(3) of the Tax Code of 1997 ." V. The Department of Justice issued an opinion to the effect that the conditions precedent to the full implementation of the provisions of RA No. 9136 has not yet taken effect . On June 15, 2002, the Department of Justice through then Justice Secretary Hernando Perez issued Opinion No. 42, Series of 2002 with respect to the query of Atty. Armando L. Suratos, Chairman and Deputy Governor of the Resource Management Sector and Security Plant Complex, Inter-Agency Committee for Review of Foreign Loan Documents of the Bangko Sentral ng Pilipinas of whether or not the National Power Corporation (NPC) has still the legal personality to issue new bonds or other forms of indebtedness and under what circumstances. It opined that "with the passage of R.A. No. 9136, and with the effectivity of its Implementing Rules and Regulations on March 22, 2002 (having been published on March 7, 2002), the NPC no longer has the legal personality to issue new bonds or other forms of indebtedness." However, on July 25, 2002, the Department of Justice issued Opinion No. 58, Series of 2002 which clarified said opinion on an issue which was raised by Secretary Jose Isidro N. Camacho that "the NPC still has the legal personality to incur indebtedness notwithstanding the passage of the EPIRA." Sec. Camacho in support of said contention stated that "the EPIRA does not repeal NPC's Charter to contract indebtedness and issue bonds." He also argued that "Even on the assumption that the transfer of NPC assets and liabilities effectively divests NPC of its borrowing authority, such transfer and divestment as mandated by Section 49 of the EPIRA has not yet in fact and in law occurred. Moreover, the 180 day period prescribed in the said Section 49 is merely directory and not self executory." The opinion of Secretary Perez taking consideration of the representations made by Secretary Camacho stated that Opinion No. 42 Series of 2002 "was issued on the assumption that everything that has been envisioned in the EPIRA is already in place, meaning, the functions of the NPC have already been unbundled, the transfer of its assets and liabilities to PSALM Corp. has been effected within the 180-day period provided for in Section 49 of the EPIRA, both TRANSCO and PSALM Corp. are fully operational, and all other conditions precedent have otherwise been fulfilled. Considering that these events have not taken place, our ruling in Opinion No. 42, current series, pertinent to the borrowing authority of NPC is not controlling ." From the above discussions, NMHC posits that since the EPIRA has not in fact taken effect, NPC continues its mandate under its charter and therefore, it shall continue to enjoy the tax privileges attached to its franchise activities. The EPIRA R.A. No. 9136 Under the EPIRA, the franchise privileges which NPC will divest in favor of TRANSCO presupposes that there was an effective transfer of the franchiseable activities which the former is undertaking. Further, since the period within which the law which organized TRANSCO is not self executory and there has been in fact no actual divestment of functions then NPC should be able to continue exercising its functions. Without the effective transfer of said activities, NPC should retain its legal personality and everything related to its franchise, as well as the tax privileges accruing to it by reason of its franchise. R.A. No. 9136 mandates the transfer of the transmission functions of NPC to TRANSCO which will then assume its franchise and consequently, as ruled by the BIR, all the tax exemption privileges, 1 to wit: "Section 3. Creation of the National Transmission Company . There is hereby created a National Transmission Corporation, hereinafter (referred to as TRANSCO, which shall assume the electrical transmission functions of the National Power Corporation (NPC) and have the powers and functions hereinafter granted. The TRANSCO shall assume the authority and responsibility of NPC for the planning, construction and centralized operation and maintenance of its high voltage transmission facilities, including grid interconnections and ancillary services. "Within six (6) months from the effectivity of this Act; the transmission and sub-transmission facilities of NPC and all other assets related to transmission operations, including the nationwide franchise of NPC for the operation of the transmission system and the grid, shall be transferred to the TRANSCO. The TRANSCO shall be wholly owned by the Power Sector Assets and Liabilities Management Corporation (PSALM Corp.) "The subtransmission functions and assets shall be segregated from the transmission functions, assets and liabilities for transparency and disposal: Provided, That the subtransmission assets shall be operated and maintained by TRANSCO until their disposal to qualified distribution utilities which are in the position to take over the responsibility for operating, maintaining, upgrading and expanding said assets. All transmission and subtransmission related liabilities of NPC shall be transferred and assumed by the PSALM Corp. xxx xxx xxx." NMHC submits that since assumption of TRANSCO of the functions and franchise of NPC as mandated in the EPIRA has not in fact been in effect, the tax privileges related thereto is still being enjoyed by NPC. Moreover, the provisions in the EPIRA mandates that a generation company's sale of generated power is subject to VAT at zero-rate. While it confirms the clear grant which has been enjoyed by generation companies supplying electricity to the National Power Corporation under its present power purchase agreement, the extent of such supply of generated power under the EPIRA is aimed to benefit the end-users. Since NPC is still assuming the transmission and subtransmission functions, the sale of generated power by an independent power producer to it should continue to qualify as VAT zero-rated. Pertinent BIR Rulings As stated above, the legal issue of whether or not the franchise privileges of NPC will be transferred to TRANSCO has been confirmed in BIR Ruling No. 020-2002 which ruled that " (ii) [O]n franchise tax, just like NPC, TRANSCO will be exempt from all forms of taxes, including franchise tax, because the NPC franchise including the privileges related thereto, have been transferred by operation of law to TRANSCO ." The foregoing is on the assumption that "TRANSCO and PSALM Corp. are fully operational, and all other conditions precedent have otherwise been fulfilled." 2 Thereafter, BIR Ruling DA-131-2003 dated April 25, 2003, which involved the status of sale transactions which were previously contracted with NPC, the BIR ruled to the effect " that TRANSCO shall be taxed in the same manner as NPC from the time the latter's franchise was transferred to it," and thus, further ruled "that the supply and delivery of asset management and consultancy services by the Concessionaire to TRANSCO under Phase One of the TRANSCO Privatization pursuant to the provisions of the EPIRA shall be subject to zero-percent (0%) VAT; . . ." It is therefore noted that the availment of the tax privileges by TRANSCO takes into account the fulfillment of the conditions precedent being envisioned in the EPIRA. Having in mind the foregoing discussion, NMHC posits that, under the present circumstances, since it is still supplying generated power to the NPC who is still exempt from indirect taxes including VAT, its sales would therefore qualify for VAT zero-rating under Section 108(B)(3) of the Tax Code. The legal issue on the VAT zero-rating of sale of electricity to NPC has already been resolved in favor of suppliers to NPC in several analogous cases elevated before the Court of Tax Appeals [ Mirant (Phils.) Mobile Corp. (formerly Southern Energy Mobile, Inc.) vs. CIR, CTA Case Nos. 5935 & 5969, Jan. 15, 2002; Southern energy Quezon, Inc. (formerly Hopewell Power (Phils.) Corp. vs. CIR, CTA Case Nos. 5933 & 5984 Jan. 15, 2002) ]. Since the personality of NPC was assumed by TRANSCO the sale transactions made by the suppliers of goods or services which had been previously zero-rated with NPC is also zero-rated with TRANSCO. AEIHaS BIR REPLY We reply as follows: I. As held by the High Court in the case of Maceda vs. Macaraig, supra, NPC had been granted tax exemption privileges for both direct and indirect taxes under P.D. No. 938 ." The original Charter of the NPC is Republic Act No. 6395, otherwise known as "An Act Revising the Charter of the National Power Corporation", has been amended by Presidential Decree ("PD") Nos. 380, 395, 759, and 938. Section 10 of PD 938 amended Section 13 of RA 6395, as follows: "Sec. 13. Non-profit Character of the Corporation; Exemption from all taxes, Duties, fees. Imposts and Other Charges by the Government and Government Instrumentalities . The Government shall be non-profit and shall devote all its return from its capital investment as well as excess revenues from its operation, for expansion. To enable the Corporation to pay its indebtedness and obligations and in furtherance and effective implementation of the policy enunciated in Section One of this Act, the Corporation, including its subsidiaries, is hereby declared exempt from payment of all forms of taxes, duties, fees, imposts as well as cost and service fees including filing fees, appeal bonds, supersedeas bonds, in any court or administrative proceedings." In the case of Maceda vs. Macaraig, G.R. No. 88291 dated June 8, 1993 , the Supreme Court had the occasion to rule on the nature of NPC's exemption from taxes, thus "A chronological review of the NPC laws will show that it has been the lawmaker's intention that NPC was to be completely tax exempt from all forms of taxes direct and indirect." xxx xxx xxx "P.D. No. 380 added the phrase "directly or indirectly" to said Section 13(d), which now reads as follows: "xxx xxx xxx "(d) From all taxes, duties, fees, imposts, and all other charges imposed directly or indirectly by the Republic of the Philippines, its provinces, cities, municipalities and other government agencies and instrumentalities, on all petroleum products used by the Corporation in the generation, transmission, utilization and sale of electric power." (Emphasis supplied) Then came Presidential Decree No. 938 which amended Section 13(a), (b), (c) and (d) into one very simple paragraph as follows: "The Corporation shall be non-profit and shall devote all its returns from its capital investment as well as excess revenues from its operation, for expansion. To enable the Corporation to pay its indebtedness and obligations and in furtherance and effective implementation of the policy enunciated in Section one of this Act, the Corporation, including its subsidiaries, is hereby declared exempt from the payment of ALL FORMS OF taxes, duties, fees, imposts as well as costs and service fees including filing fees, appeal bonds, supersedeas bonds, in any court or administrative proceedings." (Emphasis supplied) xxx xxx xxx It should be noted that Section 13 of Republic Act No. 6395, provided for tax exemptions for the following items: 13(a): court administrative proceedings; 13(b): income, franchise, realty taxes; 13(c): import of foreign goods required for its operations and projects; 13(d): petroleum products used in generation of electric power. "P.D. 938 lumped up 13(c) and 13(d) into the phrase "ALL FORMS OF TAXES, ETC.," included 13(a) under the "as well as" clause and added PNOC subsidiaries as qualified for tax exemptions. "'This is the only conclusion one can arrive at if he has read all the NPC laws in the order of enactment or issuance as narrated above in part I hereof. President Marcos must have considered all the NPC statutes from C.A. No. 120 up to its latest amendments, P.D. No. 380, P.D. No. 395 and P.D. No. 759, AND came up with a very simple Section 13, R.A. No. 6395, as amended by P.D. No. 938. "xxx xxx xxx "P.D. No. 938 did not amend the same and so the tax exemption provision in Section 8(b), R.A. No. 6395, as amended by P.D. No. 380, still stands. Since the subject matter of this particular Section 8(b) had to do only with loans and machinery imported, paid for from the proceeds of these foreign loans, THERE WAS NO OTHER SUBJECT MATTER TO LUMP IT UP WITH, and so, the tax exemption stood as is with the express mention of "direct and indirect" tax exemptions. And this "direct and indirect" tax. exemption privilege extended to "taxes, fees, imposts, other charges . . . to be imposed" in the future surely, an indication that the lawmakers wanted the NPC to be exempt from ALL FORMS of taxes direct and indirect." As regards its exemption from indirect taxes, the High Court noted that while the revised charter is silent on the indirect tax liability of the NPC, it, nonetheless, mandates that the rule on strictissimi juris in the interpretation of tax statutes could not be invoked against the NPC. Under such circumstances, the High Court found the legislative intent to exempt the NPC from indirect taxes to be unmistakable. Thus, the High Court concluded: "It is crystal clear, therefore that NPC had been granted tax exemption privileges for both direct and indirect taxes under P.D. No. 938." (Maceda vs. Macaraeg, supra, p. 241. SCRA, Vol. 223) Likewise, in said case, the High Court quoted: "Tax exemptions are undoubtedly to be construed strictly but not so grudgingly as to defeat their purpose. It is common knowledge that many impositions taxpayers have to pay are in the nature of indirect taxes. To limit the exemption granted the National Power Corporation to direct taxes notwithstanding the general and broad language of the statute will be to thwart the legislative intention in giving exemption from all forms of taxes and impositions without distinguishing between those that are direct and those that are not." ( Maceda vs. Macaraeg, supra, p. 255-256, SCRA vol. 223 ) II. NPC, being a tax exempt entity, the sale of electricity by NMHC to NPC is subject to VAT at zero percent (0%) rate . In a memorandum to the Commissioner of Internal Revenue dated January 26, 1998, the then Hon. Secretary of Finance Roberto F. De Ocampo in the exercise of his power to review rulings issued by the BIR under Section 4 of the Tax Code of 1997, held that: "The NPC Charter clearly provides for NPC's exemption from all taxes-direct and indirect. No less than the Supreme Court ruled that it has been the lawmakers intention that the NPC is completely exempt from all taxes. The Department of Justice and the Office of the Solicitor General have also issued opinions supporting the full tax exemption of the NPC. Even the BIR ruled that NPC is exempt from direct and indirect taxes. "xxx xxx xxx "In view the foregoing and using the power of review granted to the Secretary of Finance under Section 4 of Republic Act No. 8424, the DOF upholds the ruling of the Supreme Court that NPC is exempt under its charter and subsequent laws from all direct and indirect taxes in its purchases of petroleum products and electricity. Thus the purchases of NPC of electricity from independent power producers are subject to VAT at zero rate." In view of the foregoing Sections 106(A)(2)(c) and 108(B)(3) of the Tax Code of 1997 shall be apropos in such cases, to wit: "Section 106. Value-Added Tax on Sale of Goods or Properties . "xxx xxx xxx (2) [Zero-rated Sales.] The following sales by a VAT-registered person shall be subject to zero percent (0%) rate: "xxx xxx xxx "Sales to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero rate. "xxx xxx xxx "Section 108. Value-Added Tax on Sale of services and Use or Lease of Goods or Properties . "xxx xxx xxx "(B) Transactions Subject to Zero Percent (0%) The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0%) rate: "xxx xxx xxx (3) Sales to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero rate; "xxx xxx xxx Transactions falling under category (3) of the above Section 108(B)(3) are considered effectively zero-rated sale of services. As further described under Sec. 4.102-2(c) of Rev. Regs. No. 7-95, effectively zero-rated sales of services refer to the sale by a VAT-registered person to a person or entity who was granted indirect tax exemption under special laws. STcHDC However, it must be noted that the value added tax is an indirect tax and the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services [Sec. 105, NIRC; BIR Ruling Nos. 242-88 dated June 6, 1988 and 243-88 dated June 6, 1988]. But shifting of the VAT is allowed only when the purchaser does not enjoy exemption from indirect taxes. III. DOJ Opinion No. 58 states to the effect that while the EPIRA mandates the transfer of the assets and liabilities within 180-day period, and the unbundling of NPC's transmission operations including the nationwide franchise within six months, such events have not taken place; therefore, NPC shall continue to enjoy tax privileges attached to its franchise activities . The Department of Justice in its Opinion No. 58 which clarified Opinion No. 42, both Series of 2002, categorically states that "Opinion No. 42 was issued on the assumption that everything that has been envisioned in the EPIRA is already in place, meaning the functions of the NPC have already been unbundled, the transfer of its assets and liabilities to PSALM Corp. has been effected within the 180-day period provided for in Section 49 of the EPIRA, both TRANSCO and PSALM are fully operational, and all other conditions precedent have otherwise been fulfilled. Considering that these events have not taken place, our ruling in Opinion No. 42, current series, pertinent to the borrowing authority of NPC is not controlling. . . ." While the issue in consideration under the foregoing Opinion No. 58 is the borrowing authority of NPC under its Charter, the line of reasoning taken by DOJ in sustaining the legal personality of NPC notwithstanding the effectively of the EPIRA is the fact of the non-occurrence of the conditions precedent which would divest NPC of such authority. Conversely, to divest NPC of such authority, including the tax privileges granted under its charter, the transfer of its assets and liabilities to PSALM, as well as the transfer of transmission operations including its nationwide franchise to TRANSCO must have taken place. Accordingly, since the events envisioned under the EPIRA have not yet in fact taken place, NPC continues its mandate under its charter and therefore, it shall continue to enjoy the tax privileges attached to its franchise activities. In view of the foregoing and considering that the special law creating NPC (R.A No. 6395, as amended by PD 938), confers upon NPC the exemption from all forms of taxes, whether direct or indirect, and since VAT is a form of indirect tax, the sale of goods or services rendered to NPC subjects such supply of goods or services to VAT at zero percent (0%) rate pursuant to the aforecited Sections 106(A)(2)(c) and 108(B)(3) of the Tax Code of 1997. ( VAT Ruling No. 015-99 dated February 12, 1999 ). However, it shall be understood that the sellers or suppliers of electricity (generated power) and ancillary services or are consequent to such sale or supply to the NPC shall apply with the Audit Information, Tax Exemption & Incentives Division for the effective zero rating of the proceeds derived from the contracts entered with NPC pursuant to Revenue Regulations No. 7-95. Failure to do so on their part would render the transaction as only exempt from VAT. (VAT Ruling No. 015-99 dated February 12, 1999 and BIR Ruling No. DA-247-99 dated April 19, 1999) Finally, this Office declines to rule with respect to the applicability of the EPIRA to the transactions herein since conditions precedent for the full transfer of the asset and liabilities of NPC under the EPIRA have not yet been fulfilled. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it shall be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Footnotes 1. BIR Ruling No. 020-2002 dated May 13, 2002, pp. 23. 2. DOJ Opinion No. 58, Series of 2002; supra .