BIR clarifies automobile excise tax computation
THE Bureau of Internal Revenue (BIR) has issued a clarification of the method for computing the excise tax on automobiles imported for resale.
In a memorandum circular issued on Wednesday, the BIR said the clarification covers cases where an import’s selling price is “lower than the cost of importation and expenses as defined in Revenue Memorandum Circular (RMC) No. 63-22.”
The prescribed method of computing the tax in such cases is the so-called “third taxable base,” which is “the total cost of importation and expenses divided by 90%.”
Under RMC No. 63-22, the BIR said that the importer’s selling price will not be less than the cost of manufacture, assembly, or import plus the industry profit margin of 10% and other expenses incurred before the automobiles are sold to the market, provided that the suggested retail price is not less than the actual selling price. — Luisa Maria Jacinta C. Jocson