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[ REVENUE REGULATIONS NO. 5-2018, January 26, 2018 ]

REVENUE REGULATIONS IMPLEMENTING THE ADJUSTMENT OF RATES ON THE EXCISE TAX ON AUTOMOBILES PURSUANT TO THE PROVISIONS OF REPUBLIC ACT NO. 10963, OTHERWISE KNOWN AS THE “TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) LAW” AMENDING FOR THE PURPOSE REVENUE REGULATIONS NO. 25-2003

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Adopted: 05 January 2018
Date Filed: 26 January 2018

SECTION 1. SCOPE. - Pursuant to the provisions of Section 244 in relation to Section 245 of the National Internal Revenue Code of 1997 (NIRC), as amended, and Section 84 of Republic Act No. 10963, otherwise known as the “Tax Reform for Acceleration and Inclusion (TRAIN) Law” these Regulations are hereby promulgated to amend Revenue Regulations (RR) No. 25-2003 providing for the revised tax rates of excise tax on automobiles.

SEC. 2. Section 2 of RR No. 25-2003 is hereby amended as follows:

“SEC. 2. DEFINITION  OF TERMS - For purposes of these Regulations, the following words and phrases shall have the meaning indicated below:

(a)  xxx

xxx   xxx   xxx

(N) 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,   FOR   PURPOSES   OF   THIS   ACT,   A   HYBRID   ELECTRIC VEHICLE MUST BE ABLE TO PROPEL ITSELF FROM A STATIONARY CONDITION USING SOLELY ELECTRIC MOTOR.”

SEC. 3. Section 4 of RR No. 25-2003 is hereby amended as follows:

“SEC. 4. - RATES AND BASES OF THE AD VALOREM TAX ON AUTOMOBILES.   There  shall  be  levied,  assessed  and  collected  an  ad valorem tax on automobiles 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, EFFECTIVE JANUARY 1. 2018:

<table width="75%" border="1" align="center" cellpadding="0" cellspacing="0"> <tr> <td width="571" valign="top"><p> NET MANUFACTURER&rsquo;S PRICE/ IMPORTER&rsquo;S SELLI NG PRICE</p></td> <td width="265" valign="top"><p align="center"> TA X RATE</p></td> </tr> <tr> <td width="571" valign="top"><p> U P TO SIX HUNDRED THOUSAND PESOS (P600, 000. 00)</p></td> <td width="265" valign="top"><p align="center"> FOU R PERCENT ( 4%)</p></td> </tr> <tr> <td width="571" valign="top"><p> OVE R SIX HUNDRED THOUSAND PESOS (P600, 000. 00)<br> TO ONE MILLION PESOS (P1,000,000.00)</p> </td> <td width="265" valign="top"><p align="center"> TE N PERCENT (10%)</p></td> </tr> <tr> <td width="571" valign="top"><p> OVE R ONE MI LLI ON PESOS (P1, 000, 000. 00) To FOUR MI LLI ON PESOS (P4, 000, 000. 00)</p></td> <td width="265" valign="top"><p align="center"> TWENTY PERCENT (20%)</p></td> </tr> <tr> <td width="571" valign="top"><p> OVE R FOUR MI LLI ON PESOS (P4, 000, 000. 00)</p></td> <td width="265" valign="top"><p align="center"> FIFTY PERCENT ( 50%)</p></td> </tr> </table>

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 THIS 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.”

SEC. 4. Section 9 is hereby amended as follows:

“SEC. 9. TAX-EXEMPT  REMOVALS OF AUTOMOBILES.  The following 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.

a.   xxx

xxx     xxx     xxx

E.   PURELY  ELECTRIC   VEHICLES   SHALL  BE  EXEMPT  FROM  THE EXCISE TAX ON AUTOMOBILES. HYBRID VEHICLES SHALL BE SUBJECT TO FIFTY PERCENT (50%) OF THE APPLICABLE EXCISE TAX RATES ON AUTOMOBILES.  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, ATTENTION:  CHIEF EXCISE LARGE TAXPAYERS REGULATORY DIVISION (ELTRD), CERTIFIED COPIES OF THE RESULTS OF SUCH EXAMINATION  OR INDORSEMENT TO THAT EFFECT.

F.   PICK-UPS.”

SEC. 5. A new provision designated as Section 5-A in RR No. 25-2003 is hereby inserted to read as follows:

“SEC. 5-A. VALIDATION  OF MANUFACTURERS’  AND IMPORTERS’ SELLING  PRICE. - By the end of three months from the imposition  of the new rates, the Bureau of Internal Revenue shall validate the Manufacturer’s or Importer’s Selling Price of the newly introduced models against the Manufacturer’s or Importer’s Selling Price as defined herein 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  Bureau  of  Internal  Revenue  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.”

SEC. 6. TRANSITORY PROVISIONS

1.     All manufacturer’s/assembler’s  or importers  are  hereby  required  to file an updated manufacturer’s/assemblers or importer’s sworn statement for each brands/models 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,  Excise  Large  Taxpayers   Regulatory Division (ELTRD) within seven working (7) days from the date of effectivity of these Regulations. This sworn statement shall likewise be subjected to verification as required under existing regulations and issuances; and

2.     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 Commissioner of Internal Revenue, Attention: Chief, Excise LT Field Operations Division (ELTFOD) 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.

SEC. 7. REPEALING  CLAUSE.  - All regulations,  rulings  or orders  or portions thereof which are inconsistent with the provisions of these Regulations are also hereby revoked, repealed or amended accordingly.

SEC.  8.  EFFECTIVITY   CLAUSE.  -  These  Regulations  shall  take  effect  on January 1, 2018 following its complete publication in the Official Gazette or in at least one (1) newspaper of general circulation.

(SGD) CARLOS G. DOMINGUEZ
Secretary of Finance

Recommending  Approval:

(SGD) CAESAR R. DULAY
Commissioner  of Internal Revenue</DIV>