Philippines: Direct and indirect tax incentives for natural gas projects

Tax incentives for Philippine Downstream Natural Gas (PDNG) projects

Tax incentives for Philippine Downstream Natural Gas (PDNG) projects

The House of Representatives on 2 August 2023 approved the third and final reading of House Bill (HB) No. 8456 (the “Philippine Downstream Natural Gas Industry Development Act”), which would provide the following tax incentives for Philippine Downstream Natural Gas (PDNG) projects:

  • 0% value added tax (VAT) on the sale of natural gas
  • 0% VAT for liquefied natural gas (LNG) terminals, PDNG transmission systems, and PDNG distribution systems on their purchases of local supply of goods, properties and services needed for development, construction, and installation of their facilities
  • Investments to convert facilities from oil and coal to natural gas would be considered as qualified capital expenditures under Section 294 (C) of the National Internal Revenue Code

Read an August 2023 report prepared by the KPMG member firm in the Philippines



The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.