Prescribing the Guidelines for the Implementation of The Seating Capacity Criterion in Imposing Ad Valorem Tax on Utility Vehicles

July 5, 1996 BIR RULING NO. 073-96 149-00 075-89 073-93 MEMORANDUM FROM : Liwayway Vinzons-Chato Commissioner of Internal Revenue TO : All Revenue District Officers and Others Concerned SUBJECT : Prescribing the Guidelines for the Implementation of The Seating Capacity Criterion in Imposing Ad Valorem Tax on Utility Vehicles In order to simplify the categorization of both locally assembled and imported utility vehicles for purposes of imposing the ad valorem tax pursuant to Section 149 of the Tax Code, the seating capacity criterion is hereby prescribed in accordance with the following guidelines. cdt 1. A utility vehicle shall be considered automobile for purposes of imposing the ad valorem tax if it is specialty designed for the transport of passengers no exceeding nine (9) including the driver. 2. The passenger seats should conform to the area specifications prescribed under Article 11, Section 8(a), of R.A. 4136, reading: a) For each adult passenger, a horizontal rectangular area, including seat and feet space is not less than thirty-five centimeters wide and sixty centimeters long, except in the front seat, which shall allow an area of fifty centimeters wide for the operation. b) For each half passenger, a horizontal rectangular area, including seat and feet spaces is not less than seventeen and a half centimeters wide by sixty centimeters long, provided that each continuous row of seats shall not be allowed to have more than one-half passenger."(Emphasis supplied) 3. A Utility Vehicle especially designed for the carriage of goods, cargo, freight, or for special purpose i.e. a hearse ambulance and similar vehicles shall be exempt from ad valorem tax. BIR Ruling Nos. 377-93, 73-95, and other rulings which applied engine displacement criterion are hereby revoked. For immediate compliance by all internal revenue officers, and others concerned. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue