9/5/2022

EXCISE TAXES ON AUTOMOBILES

2022 REVIEW There shall be levied, assessed and collected an

PRACTICAL COMPUTATION ad valorem tax on automobiles based on the
MOTOR VEHICLES manufacturer’s/assembler’s or importer’s selling
DAY 07 price, net of excise and value-added tax in case
of importation by manufacturer of dealer or when
CB KIRK BUDUAN
it is for sale, and base per landed cost should
automobile be not subject for sale.

 Truck/Cargo Vans- shall refer to a motor vehicle of any

TERMS DEFINED,
configuration and with any number of wheels and axles that
Automobile - shall refer to any four (4) or more-wheeled motor
is exclusively designed for the carriage of goods and actually
vehicle regardless of seating capacity, which is propelled by
gasoline, diesel, electricity or any other motive power. used and registered as such with the Land Transportation
- for purposes of these Regulations, buses, trucks, cargo van, Office; provided, that pick-ups shall be considered as trucks.
jeeps/jeepneys/jeepney substitutes, single cab chassis, and special
purpose vehicles as herein defined shall not be considered as  Jeep/ Jeepney/ Jeepney Substitutes - shall refer to the
automobiles.
“Philippine jeep or jeepney” which are of the jitney type
Note: pick-ups (commonly used for commercial and
locally designed and manufactured generally from surplus
agricultural purposes) and electric vehicles will be exempt
parts and components. It shall also include jeepney
from payment of excise taxes as per TRAIN (Tax Reform
substitutes that are manufactured for brand new single cab
for Acceleration and Inclusion) Act. Hybrid Cars will be
subjected to excise taxes at half the rates. chassis or cowl chassis and locally customized rear body
that has continuous sideway row seats with open rear door
and without retractable glass windows.

 Bus- shall refer to a motor vehicle of any configuration with  Hybrid Electronic vehicle - shall mean a motor vehicle
gross vehicle weight of four (4) tons or more with any
number of wheels and axles, which is generally accepted powered by electric energy, with or without provision for off-
and specially designed for mass or public transportation. vehicle charging, in combination with gasoline, diesel or any
other motive power; Provided, That, for purposes of this act, a
 Single Cab Chassis - shall refer to a motor vehicle with hybrid electric vehicle must be able to propel itself using
complete engine power train and chassis equipped with a
cab that has a maximum of two (2) doors and only one (1) electric motor.
row of seats. • Provided, that in the case of imported automobiles not for
sale, the tax imposed herein shall be based on the total
 Special Purpose Vehicle - shall refer to a motor vehicle, other
landed value, including transaction value, customs duty
than truck, cargo van, jeep/jeepney/jeepney substitute, bus,
single cab chassis as defined herein, designed for specific and all other charges.
applications such as cement mixer, fire truck, boom truck, -Automobiles used exclusively within the freeport zone shall
ambulance and/or medical unit, and off-road vehicles for
heavy industries and not for recreational activities. For this be exempt from excise taxes.
purpose, “designed for specific applications” shall mean the
motor vehicle is designed in such a manner that it can only
be used strictly for the intended purpose for which it was
manufactured.

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PERSONS LIABLE RATES AND BASES OF THE AD

VALOREM TAX ON AUTOMOBILES
The following persons shall be liable for the payment
of ad valorem tax on automobiles:
Net Manufacturer’s Price Rate
a. On locally manufactured/assembled automobiles
Up to P 600,000.00 4%
-The excise tax shall be paid by the manufacturer/assembler of
Over P 600,000.00 to
automobiles. 10%
P 1,000,000.00
b. On imported automobiles
Over P 1,000,000.00 to
-The excise tax shall be paid by the owner or importer of the automobile 20%
or by the dealer/trader, or by any person who is found in possession of P 4,000,000.00
any untaxed automobiles including any person other than the one legally Over P 4,000,000.00 50%
entitled to exemption from the ad valorem tax in the proper case.

RATES OF DUTY FOR AUTOMOBILES

RATES AND BASES OF THE AD
VALOREM TAX ON HYBRID VEHICLES  87.02 Includes among others, automobiles for the
transport of 10 or more persons, including the
Net Manufacturer’s Price Rate driver. (e.g. 14 seater vans)
Up to P 600,000.00 2%
RATE OF DUTY – 20% AD VALOREM
Over P 600,000.00 to
5%
P 1,000,000.00  87.03 Includes among others, automobiles for the
Over P 1,000,000.00 to transport of 9 persons and below. (passenger
10% cars, station wagons, sports cars and racing cars)
P 4,000,000.00
Over P 4,000,000.00 25% RATE OF DUTY – 30% AD VALOREM

IMPORTATION OF AUTOMOBILES ARE BRAND NEW AUTOMOBILES

CATEGORIZED AS FOLLOWS:
As contemplated under DOF Joint Order No. 1-2010 refers to the following
1. Brand new consigned to car manufacturer/dealer criteria:
2. Brand new consigned to natural person
1. Of current or advance year model in the country of origin and/or
3. Used consigned to Filipino diplomats and/or DFA officials
manufacture; or
4. Used consigned to Filipino returning residents who have resided abroad
2. With year model of the immediately preceding year in the country of
for at least 1 year
origin and/or manufacture provided that:
5. Sale of automobile from privilege person to a non- privilege person
(Local Purchase) a. The motor vehicle has mileage of not more than 200 kms or 125
6. Sale of automobile from privilege person to another privilege person miles, and
(Local Purchase) b. The motor vehicle has been acquired by the importer from the car
dealer as first owner
- A brand new automobile with year model of immediately preceding year
shall not be accorded any depreciation allowance.

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DEPRECIATED VALUE OF AUTOMOBILE MANUFACTURER’S OR IMPORTER’S

The depreciated value of automobile at the time of sale, transfer, or SELLING PRICE
exchange shall be based on the provisions of CAO 7-2014.
• The net manufacturer’s or importer’s selling price shall refer to the price,
Automobile Allocated Depreciation Rate net of excise and value added taxes, at which locally
manufactured/assembled or imported automobiles are offered for sale by
Year Model Depreciation (Multiplier) the manufacturer/assembler or importer to the dealers, or to the public
directly or through their sales agents, as reflected in the
Current Year 0% None manufacturer’s/assembler’s or importer’s sworn statement duly filed with
1 year old 10% X .90 the BIR, or in their sales invoices/official receipts, whichever is higher.
provided, that in computing the manufacturer’s/assembler’s or importer’s
2 years old 20% X .80 selling price, it shall always include the value of car air conditioner, radio
3 years old 30% X .70 and mag wheels including the cost of installation thereof whether or not the
same were actually installed in the automobile. Provided, further, that in no
4 years old 40% X .60 case shall the manufacturer’s/assembler’s or importer’s selling price be
less than the amount computed as follows:
5 years old 50% X .50 • 80% x (Suggested Retail Price - Excise Tax - Value-Added Tax).

NOTE:
How do you derive with the correct Importer Selling Price for
the importation of brand new automobiles consigned to car
manufacturer/dealer? HYBRID ELECTRONIC VEHICLE- shall mean a motor vehicle
powered by electric energy, with or without provision for off-
a. 80% X (Suggested Retail Price - [value added tax (VAT) +
excise tax (ET)]) vehicle charging, in combination with gasoline, diesel or any
other motive power; Provided, That, for purposes of this act, a
b. Gross Selling Price – [value added tax (VAT) + excise tax
(ET)] hybrid electric vehicle must be able to propel itself using
electric motor.
• To derive for the correct ISP to be used as basis for the
computation of ad valorem tax for brand new automobile
consigned to Car Manufacturer/Dealer choose whichever However, if it is a purely electronic vehicle, therefore it is not
is higher between a and b. considered as hybrid thus, treated as exempted from payment
of the excise tax as clearly stipulated in the provisions of the
Tax Reform for Acceleration and Inclusion (TRAIN) law.

AUTOMOBILES SUBJECT TO EXEMPTION

FROM PAYMENT OF
AD VALOREM TAX UNDER TRAIN LAW

1. Pick-ups (commonly used for commercial

and agricultural purposes)
2. Purely electric vehicles
3. Automobiles used exclusively within the
freeport zone