RR No. 5-2018 — Implements the adjustment of rates on Excise Tax on Automobiles pursuant to the provisions of RA No. 10963 (TRAIN Law), amending for the purpose Revenue Regulations No. 25-2003 (Published in Manila Bulletin on January 18, 2018)

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE Quezon City BUREAU OF BTERNAL RPESL RECORDS MCT DIVISE RECEIVED jAN 15 2018 I0:40..A. M. leo

January 5, 2018

REVENUE REGULATIONS NO.5-20/8

SUBJECT : Revenue Regulations Implementing the Adjustment of Rates on the

Inclusion (TRAIN) Law" Amending for the Purpose Revenue Regulations No. 25-2003 Excise Tax on Automobiles pursuant to the Provisions of Republic Act No. 10963, otherwise known as the "Tax Reform for Acceleration and

TO : All Internal Revenue Officers and Others Concerned.

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

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

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

(a) xxx

XXX. XXX XXX

(N) HYBRID ELECTRIC VEHICLE - SHALL REFER TO A MOTOR MOTiVE POWER: PROVIdEd, tHAt, FOr PURPOSES oF tHiS Act, A HybrId eLeCtrIC VeHiCle MuSt Be AbLe tO ProPeL itSELF FroM A StAtionArY Condition uSinG VEHICLE POWErED BY ELECTRIC EnERgY. WItH OR WitHoUt ProVision FoR OFF-vEhICLE CHArgIng. In CoMbination witH Gasoline, dieseL Or any otHer SOLELY ELECTRIC MOTOR.

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

automobiles based on the manufacturer's/assembler's or importer's selling price. net AUTOMOBILES. There shall be levied, assessed and collected an ad valorem tax on -Sec. 4. -- RateS and BaSeS OF tHe ad valoreM taX On

C

Page 2 of 4 Revenue Regulations No.

of excise and value-added tax, in accordance with the following schedule. EFFECTIVE JANUARY 1, 2018:

NET MANUFACTURER'S TAX RATE PRICE/ IMPORTER'S SELLING PRICE

UP TO SIX HUNDRED FOUR PERCENT (4%) THOUSAND PESOS (P600,000.00)

(P1,000,000.00) OVER SIX HUNDRED THOUSAND PESOS (P600,000.00) TO ONE MILLION PESOS TEN PERCENT (10%)

MILLION PESOS (P4,000,000.00) OVER ONE MHLLION PESOS (P1,000,000.00) TO FOUR TWENTY PERCENT (20%)

(P4,000,000.00) OVER FOUR MILLION PESOS FIFTY PERCENT (50%)

PROVIDED, THAT HYBRID VEHICLES SHALL BE TAXED AT FIFTY

AUTOMOBILES SUBJECT TO THE CONDITIONS IN SECTION 9(E) OF PERCENT (50%) OF THE APPLICABLE EXCISE TAX RATES ON

SHALL BE BASED ON THE TOTAL LANDED VALUE, INCLUDING THIS REGULATIONS: PROVIDED, FURTHER, THAT IN THE CASE OF IMPORTED AUTOMOBILES NOT FOR SALE, THE TAX IMPOSED HEREIN TRANSACTION VALUE, CUSTOMS DUTY AND ALL OTHER CHARGES."

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

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

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 MANUFACTURING REMOVAL DEPARTMENT OF OF PLANT THE ENERGY OR CUSTOMS CUSTODY, THE AUTOMOBILES (DOE) SHALL FROM DETERMINE THE

WHETHER THE AUTOMOBILES ARE HYBRID VEHICLES OR

RECORDS MGT. DIVISICN BUREAU OF INTERNAL REVENUE JAN 15 2018 10:40A.M.

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Revemue Regulations No. Puge 3 of 4

PURELY ELECTRIC VEHICLES, ANDFURNISH THE COMMISSIONER OF INTERNAL REVENUE, ATTENTION: CHIEF EXAMINATION OR INDORSEMENT TO THAT EFFECT. EXCISE LARGE TAXPAYERS REGULATORY DIVISION (ELTRD), CERTIFIED COPIES OF THE RESULTS OF SUCH

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

newly introduced models against the Manufacturer's or Importer's Selling Price as of Internal Revenue shall validate the Manufacturer's or Importer's Selling Price of the 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 be classified." defined herein and initially determine the correct bracket under which a newly 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

SEC. 6. TRANSITORY PROVISIONS

I. All manufacturer's/assembier's or importers are hereby required to file an updated automobiles as of the day immediately before the date of effectivity of these Regulations submitted to the Commissioner of Internal Revenue, Atiention: Chief, Excise Large Taxpayers Regulatory Division (ELTRD) within seven working (7) days from the date manufacturer's/assembiers or importer's sworn statement for each brands/models of The updated manufacturer's/assembler's or importer's sworn statement shall be

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, inciuding Completely Knocked- Down (CKD) and Semi-Knocked Down (SKD) units, that are located within the 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 iist shall be submitted to the Commissioner of Internal manufacturing/assembly plant, storage facility or warehouse or the customs' premises

construed that the said manufacturers/assemblers/ importers do not have any inventory 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/assembiers/ importers shall be on hand of CBUs. CKDs and SKDs as of the day immediately before the date of effectivity of these Regulations. BUREAU OF INTERNAL REVENUE N

RECORDS MGT DIVISICN JAN 15 2018 ID:40A.M

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Revenue Regulations No. Page 4 of 4

SEC. 7. REPEALING CLAUSE. -- AIl 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 Gazettes or in at least one (1) newspaper of general circulation.

CARLOS G. DOMIN&UEZ

000719 Secretary of Finance JAN 11 2018

Recommending Approval:

1cwonAy BUREAU OF INTERNAL REVENUE

Commissioner of Internal Revenue CAESAR R. DULAY 012459 RECORDS MGT. DIVISIUN RECEIVED JAN 15 2018 10:40 A-M UN7oM

BIR TRA IN IRR/RR Drafting Committee