BIR Ruling

July 10, 1973 FGU Insurance Group P. O. Box 70 Commercial Center Makati, Rizal D-708 Attention: Mr . Ernesto F . Martinez Gentlemen : This refers to your letter dated May 2, 1973 requesting information as to whether under the provisions of the Tax Code, as amended by Presidential Decree No. 69, imported motor vehicles are still classified as luxury articles subject to a higher rate of tax. cdi In reply, I have the honor to inform you that imported automobiles are classified as luxury items subject to a higher rate of tax pursuant to Section 184-A(B) in relation to Section 185(b), both of the Tax Code, as amended by Presidential Decree No. 69. Section 184-A(B) of the Tax Code, as amended provides: "SEC. 184-A. Percentage tax on sales of automobiles . xxx xxx xxx "(A) For imported automobiles . If the landed cost plus mark-up as established by section 183(b) of this Code does not exceed P20,000, the tax shall be 100% of such landed cost plus mark-up: If it exceeds P20,000 but does not exceed P25,000, the tax shall be P20,000 plus 125% of the over P20,000; If it exceeds P25,000 but does not exceed P30,000, the tax shall be P26,250 plus 150% of the excess over P25,000; If it exceeds P30,000 but does not exceed P35,000, the tax shall be P33,750 plus 175% of the excess over P30,000; If it exceeds P35,000, the tax shall be P42,500 plus 200% of the excess over P35,000." It should be noted however, that the term "automobiles" does not include motor vehicles classified as trucks and jeeps which are only subject to 7% advance sales tax based on the landed cost thereof plus 25% mark-up pursuant to Section 183(b) in relation to Section 186, both of the Tax Code, as amended by Presidential Decree No. 69. aisadc Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5