BIR Ruling

December 8, 1971 The Honorable The Secretary of Foreign Affairs Manila Attention: Mr . Josue L . Villa Office of Economic Affairs S i r : This refers to your letter dated November 17, 1971 to the Secretary of Finance requesting that information on query No. 4 of Despatch No. 1238/71 dated September 7, 1971 from the Philippine Embassy in Djakarta, Indonesia, be furnished that Office. In reply, I have the honor to inform you that our Tax Code, Commonwealth Act No. 466, as amended, does not impose any percentage tax on assembling cost. However, under Section 184 (a) of the said Code, an automobile locally manufactured is subject to the following rates of tax: (a) 100% sales tax if the selling price of the car does not exceed P10,000.00; (b) 125% sales tax if the selling price of the car exceeds P10,000.00 but does not exceed P15,000.00; (c) 150% sales tax if the selling price of the car exceeds P15,000.00 but does not exceeds P20,000.00 However, if the car is imported, the tax shall be based on the landed cost thereof, plus 100% mark-up pursuant to Section 183 (b) in relation to Section 184 (a), both of the Tax Code. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue