REVENUE REGULATIONS (RR) NO. 018-2025
This Circular clarifies that pursuant to Sections 244 and 245 of the National Internal Revenue Code of 1997, as amended, in relation to Sections 18 and 25 of RA No. 12214, otherwise known as the “Capital Market Efficiency Promotion Act” (CMEPA), these Regulations are hereby promulgated to amend RR No. 025-2003, as amended, in relation to RR No. 5-2018, mainly for the purpose of removing pick-ups from the list of tax-exempt automobiles.
It covers the exclusion of “pick-ups” (motor vehicles having enclosed cab and open bodies with low slides and tailgates) from the list of automobiles exempt from excise tax starting July 1, 2025.
Ad Valorem Tax on Automobiles
| Net Manufacturer’s/Importer’s Selling Price(1) | Tax Rate(2)(3) |
| Up to ₱600,000 | 4% |
| Over ₱600,000 to ₱1,000,000 | 10% |
| Over ₱1,000,000 to ₱4,000,000 | 20% |
| Over ₱4,000,000 | 50% |
(1) Net of Excise Tax and Value-Added Tax
(2) Hybrid vehicles shall be subject to fifty percent (50%) of the applicable excise tax rates on automobiles.
(2) Purely electric vehicles shall be exempt from excise tax on automobiles.
TAX-EXEMPT REMOVALS OF AUTOMOBILES. This section highlighted the exclusion of pick-up trucks and the tax-exempt removals of either locally manufactured or assembled or release of imported automobiles that are subject to certain conditions.
a. Removals of exports
| 1. Permit to Export | Written permission from the Commissioner of Internal Revenue (CIR) stating the brand, number of units and the value per unit exported, country of destination, name of vessel, consignee, and place of loading. Failure to comply will result in illegal removal and will be subject to payment of tax. |
| 2. Direct delivery to vessel | Must be supervised by an authorized internal revenue officer and have an immediate certification by the Bureau of Customs (BOC) after loading and departure of the vessel. |
| 3. Proof of Exportation | Exporters are required to submit the following proofs of exportation in line with the BIR within 30 days from removal.Statement of Bangko Sentral ng Pilipinas (BSP) or any accredited banks that proceed of sale and in accordance with bank rules.Certified True Copy of Bill of Lading or Airway billCommercial invoice issued by the manufacturer/assembler-exporter to the foreign consigneeAn Export Entry and a Certificate of Inspection and Loading issued by the BOC officer who supervised the actual loading of automobile units into vessels. If proofs are not submitted within 30 days or not satisfactory with the CIR, the manufacturer/assembler-exporter will be required to pay excise tax and applicable penalties. The payment will be entered into Official Register Book |
| 4. Exporter’s Bond | If necessary, exporter is required to give a bond for the amount equivalent to the removal of the same for export shipment. |
b. Delivery to tax-exempt person – Allowed without pre-payment of tax but subject to certain conditions
| Tax exempt persons or entities | Foreign governments subject to reciprocityTax-exempt organizations pursuant to special lawsOther tax-exempt entities covered by treaties |
| Requirements in the sale of automobiles to tax exempt entities | Prior written approval from CIR before removalApplication of tax exemption for tax-exempt customers must be in writing, with certified true copy of purchase order, chassis and engine number and place of delivery. Written approval from CIR for exemption is only valid for that particular transaction. |
| Tax credits/refunds by tax persons or entities | For tax-exempt person who paid or have been erroneously collected ad valorem tax, may file a claim for tax refund or credit to the CIR within 2 years from date of payment by submitting the following:Authenticated copy of the Certificate of Tax ExemptionSales invoices (original/photocopies)Certified photocopies of proof of payment of tax |
c. Removals for delivery and use exclusively within freeport zone
- Imported abroad or purchased from customs territory for use exclusively located within freeport zone should be exempt from tax. Therefore, if automobiles are directly imported or re-introduced it should be considered as importation.
d. Removal of automobiles for test run
- Prior to test run, there must be a notice given to the BIR office and under the test run, the unit must be returned to the plant on the same day. Failure to return will result in tax payment due and demandable.
RESPONSIBILITY OF MANUFACTURERS, ASSEMBLERS AND IMPORTERS
All manufacturers, assemblers or importers are required to file an updated sworn statement on all brands of pick-ups as of June 30, 2025, to CIR and in attention of Chief, Excise Large Taxpayers Regulatory Division (ELTRD) within 15 working days from effectivity date of these Regulations. The statement is subject to verification.
Also, they are required to submit a duly notarized list of inventory on-hand Completely Built-up pick-ups including Completely Knocked-Down and Semi-Knocked Down that are found in plants and storage facilities. The import entries must be also filed with the BOC on or before June 30, 2025. It must be also submitted to CIR with the attention of Chief, Excise LT Field Operations Division (ELTFOD) within 15 working days from effectivity date of these Regulations. Failure to submit the inventory list shall be construed that the concerned manufacturers, assemblers or importers do not have any inventory on hand or in transit as of June 30, 2025.