RR No. 25-2003: Amends the Revenue Regulations governing the imposition of Excise Tax on automobiles pursuant to the provisions of Republic Act No. 9224.

Key points

1. What counts as an automobile. An automobile is any motor vehicle with four (4) or more wheels, regardless of seating capacity, powered by gasoline, diesel, electricity or other motive power. Buses, trucks, cargo vans, jeeps/jeepneys/jeepney substitutes, single cab chassis and special purpose vehicles, as defined in the Regulations, are not automobiles.
2. Who pays. For local automobiles, the manufacturer/assembler pays. If they are removed without payment, the dealer/trader, owner or possessor is liable. For imported automobiles, the owner, importer, dealer/trader or any possessor of untaxed automobiles is liable. A buyer or transferee of tax-free imports sold to non-exempt persons is treated as the importer.
3. Ad valorem rates. The tax is based on the selling price net of Excise and VAT. It is 2% up to P 600,000.00, P 12,000.00 plus 20% of the excess over P 600,000.00 up to P 1,100,000.00, P 112,000.00 plus 40% of the excess over P 1,100,000.00 up to P 2,100,000.00, and P 512,000.00 plus 60% of the excess over P 2,100,000.00.
4. Price rules and indexation. The selling price is never less than cost plus a 10% industry profit margin and other expenses. Brackets are indexed every two (2) years if the peso-dollar exchange rate changes by more than ten percent (10%), and extraordinary indexation applies if the change is at least twenty percent (20%) for a continuous period of at least ten (10) days. Imports for personal use are taxed on total landed value.
5. Exempt removals and tax-exempt buyers. Removals for export, delivery to tax-exempt persons, delivery and use exclusively within a freeport zone, and test runs are exempt, subject to conditions. Resale by a tax-exempt person to a non-exempt person is taxed on the higher of actual consideration or depreciated value at 10% per year, with depreciation capped at fifty percent (50%) of original cost.
6. Compliance and inventory. Producers file a consolidated excise tax return in triplicate per place of production and pay before removal, or may keep an advance deposit. Removals need a Withdrawal Certificate. Importers and manufacturers file an updated sworn statement per brand/model and a notarized inventory list as of the day before effectivity, and failure to submit the list is construed as no inventory. The BIR conducts stocktaking within five (5) days of submission and a total physical inventory every six (6) months.

Who is affected

• Manufacturers, assemblers and importers of automobiles
• Dealers, traders, owners and possessors of automobiles
• Tax-exempt persons or entities that acquire automobiles

Deadlines and effectivity

• Brackets indexed once every two (2) years under ordinary indexation
• Stocktaking of inventory lists within five (5) days of submission
• General physical inventory every six (6) months