REVENUE REGULATIONS NO.
5-2018 issued on January 15, 2018 implements the
adjustment of rates on Excise Tax on Automobiles pursuant to the provisions of Republic Act
(RA) No. 10963 (Tax Reform for Acceleration and Inclusion [TRAIN] Law), amending for the
purpose Revenue Regulations No. 25-2003.
Effective January 1, 2018, an Ad Valorem Tax on automobiles shall be levied, assessed
and collected based on the manufacturer’s/assembler’s or importer’s selling price, net of Excise
and Value-Added Tax, in accordance with the following schedule:
NET MANUFACTURER’S PRICE/ TAX RATE
IMPORTER’S SELLING PRICE
Up to Six Hundred Thousand Pesos Four Percent (4%)
(P 600,000.00)
Over Six Hundred Thousand Pesos Ten Percent (10%)
(P 600,000.00) to One Million Pesos
(P 1,000,000.00)
Over One Million Pesos Twenty Percent (20%)
(P 1,000,000.00) to Four Million Pesos
(P 4,000,000.00)
Over Four Million Pesos Fifty Percent (50%)
(P 4,000,000.00)
Provided, that hybrid vehicles shall be taxed at Fifty Percent (50%) of the applicable
Excise Tax rates on automobiles subject to the conditions in Section 9(e) of the regulations.
Provided, further, that in the case of imported automobiles not for sale, the tax imposed herein
shall be based on the total landed value, including transaction value, customs duty and all other
charges.
Hybrid electric vehicle shall refer to a motor vehicle powered by electric energy, with or
without provision for off-vehicle charging, in combination with gasoline, diesel or any other
motive power. Provided, that a hybrid electric vehicle must be able to propel itself from a
stationary condition using solely electric motor.
The removals of locally-manufactured/assembled or release of imported automobiles
from the place of production or from customs’ custody, respectively, are exempt from the
payment of the appropriate Excise Taxes, subject to certain conditions. Newly-included in the
list of tax-exempt removals of automobiles are pick-ups and purely electric vehicles.
Prior to the removal of the automobiles from the manufacturing plant or customs custody,
the Department of Energy (DOE) shall determine whether the automobiles are hybrid vehicles or
purely electric vehicles, and furnish the Commissioner of Internal Revenue (CIR), Attention:
Chief, Excise Large Taxpayers Regulatory Division (ELTRD), certified copies of the results of
such examination or indorsement to that effect.
By the end of three months from the imposition of the new rates, the BIR shall validate
the Manufacturer’s or Importer’s Selling Price of the newly-introduced models against the
Manufacturer’s or Importer’s Selling Price, and initially determine the correct bracket under
which a newly-introduced model shall be classified.
After the end of one year from such validation, and every year thereafter, the BIR shall
revalidate the initially validated Net Manufacturer’s or Importer’s Selling Price against the Net
Manufacturer’s or Importer’s Selling Price as of the time of revalidation in order to finally
determine the correct tax bracket under which a newly-introduced model shall be classified.
All manufacturers/assemblers or importers are required to file an updated
manufacturer’s/assembler’s or importer’s sworn statement for each brand/model of automobiles
as of the day immediately before the date of effectivity of these Regulations. The updated
manufacturer’s/assembler’s or importer’s sworn statement shall be submitted to the
Commissioner of Internal Revenue, Attention: Chief, ELTRD within seven (7) working days
from the date of effectivity of these Regulations.
All manufacturers/assemblers or importers shall submit a duly notarized list of inventory
on-hand of Completely Built-Up (CBU) automobiles, including Completely Knocked-Down
(CKD) and Semi-Knocked Down (SKD) units that are located within the
manufacturing/assembly plant, storage facility or warehouse or the customs’ premises for which
import entries have been filed as of the day immediately before the date of effectivity of these
Regulations, indicating therein the brand, year model, engine, body and chassis numbers thereof.
The list shall be submitted to the CIR, Attention: Chief, Excise LT Field Operations Division
within seven working (7) days from the date of effectivity of these Regulations. Failure to submit
the inventory list on the part of the manufacturers/assemblers/importers shall be construed that
the said manufacturers/assemblers/importers do not have any inventory on hand of CBUs, CKDs
and SKDs as of the day immediately before the date of effectivity of these Regulations.
