RMC No. 63-2022: Clarifies the proper taxable base of Excise Tax in the manufacturer’s/assembler’s or importer’s sworn statement and integration of the monitoring, supervision and reporting of excisable products under Revenue Administrative Order No. 2-2014

Summary

RMC No. 63-2022 clarifies the correct taxable base for the Excise Tax on automobiles in the manufacturer’s, assembler’s or importer’s sworn statement, and integrates the monitoring of excisable products under Revenue Administrative Order No. 2-2014.

Key points

1. Rates. The ad valorem tax on automobiles is based on the net selling price, excluding Excise and VAT, of the manufacturer, assembler or importer. The rates are 4% up to ₱600,000.00, 10% over ₱600,000.00 to ₱1,000,000.00, 20% over ₱1,000,000.00 to ₱4,000,000.00, and 50% over ₱4,000,000.00.
2. What the selling price includes. Section 5 of RR No. 25-2003, as amended, uses the higher of the sworn statement price or the sales invoice or official receipt price. It always includes the car air conditioner, radio and mag wheels with installation cost, and other necessary accessories such as leather seats, air bags and cruise control, whether or not actually installed. The price cannot be less than 80% x (Actual Dealer’s Suggested Selling Price – Excise Tax – Value-Added Tax), nor less than the cost plus a ten percent (10%) industry profit margin and other expenses.
3. Three taxable bases. The bases are the declared selling price net of Excise and VAT, 80% of the actual dealer’s price net of Excise and VAT, and the total cost of importation and expenses divided by 90%. Excise Tax is computed on the highest of these in the Sworn Statement under Annex A of RMC No. 58-2003.
4. ATRIG condition. No Authority to Release Imported Goods is issued for imported automobiles without computing the three tax bases, to show that Excise Tax was based on the highest value.
5. Monitoring. The Excise Large Taxpayer Field Operations Division reconciles issued ATRIGs with removals per the Excise Taxpayer’s Removal Declaration and stock per the Official Register Book. It also validates automobiles registered with the Land Transportation Office, which issues conduction stickers, in line with Revenue Administrative Order No. 2-2014.

Who is affected

• Manufacturers, assemblers and importers of automobiles

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.