Taxes on the Original Sales of Locally Assembled Automobiles

January 20, 1958 BIR RULING NO. 039-58 Guevara & Sons 553 Raon Street Santa Cruz, Manila Gentlemen : In reply to your letters dated December 16, 1957 and January 14, 1958, requesting information regarding the amount of tax which would be due on: cdta a. Original sales of "Volkswagen" 4-cylinder Karmann-Chia automobiles to be assembled by you; and b. Imported automobiles of the same type as above, I have the honor to inform you that original sales of locally assembled automobiles are subject to the following tax rates: 1. 50% sales tax when selling price does not exceed P7,000; 2. 75% sales tax when the selling price exceeds P7,000 but does not exceed P10,000; and 3. 100% sales tax when the selling price exceeds P10,000, pursuant to Section 183, in relation to Section 184(a), both of the National Internal Revenue Code. The aforesaid rates shall, however, be applied to the taxable amount, represented by the difference between the gross selling price and the deductible cost of raw materials. Where such raw materials are imported, the same are subject to the 7% advance sales tax prescribed by Section 183(b), in relation to Section 186, both of the Tax Code, based on the total landed cost thereof, plus the mark-up prescribed by Republic Act No. 594. Imported automobiles of the type mentioned above are subject to the advance sales tax at the same tax rates prescribed for assembled automobiles, based on the total landed cost of such automobiles plus the 100% mark-up, pursuant to Section 183(b), in relation to Section 184(a), both of the Tax Code, as amended by Republic Act No. 594. LLjur In connection with your query regarding duties, you are requested to direct the same to the Commissioner of Customs, Manila. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue