BIR Clarifies Provisions in a Previous Memorandum Pertaining to Excise Tax Rates for Automobiles

The Bureau of Internal Revenue (BIR), through Revenue Memorandum Circular No. 20-2023 (Circular) issued on February 8, 2023, addressed the issues and concerns pertaining to the correct tax base in computing excise tax on the importation of automobiles for resale pursuant to the Tax Code of 1997, as amended.


The Circular specifically clarifies a provision in a previous RMC which states thus:


“Based on the above provisions, there are three (3) primary taxable bases in applying the excise tax rates for automobiles, namely:

  1. Declared manufacturer’s or importer’s selling price, net of excise and value-added taxes;
  2. Based on the 80% actual dealer’s price, net of excise and value-added taxes; and
  3. Based on the total cost of importation and expenses divided 90%.” (Section 5 of RMC No. 63-2022)


The BIR clarifies that the 3rd taxable base provided in number 3 above shall only apply in cases where the Net Importer’s selling price is lower than the cost of importation and expenses as defined in said RMC.


Read the full Revenue Memorandum Circular here.

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