DOF-BOC-BIR Joint Order No. 1-2010 Re: Valuation of Motor Vehicles

June 22, 2010 REVENUE MEMORANDUM CIRCULAR NO. 052-10 SUBJECT : Publishing the Full Text of Joint Order No. 1-2010 Dated April 5, 2010 by the Secretary of the Department of Finance (DOF) and Commissioners of Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR), Respectively, Entitled Valuation of Motor Vehicles TO : All Internal Revenue Officials, Employees and Others Concerned For the information and guidance of all concerned, quoted hereunder is the full text of Joint Order No. 1-2010 dated April 5, 2010 by the Secretary of the Department of Finance and Commissioners of Bureau of Customs and Bureau of Internal Revenue: "Republic of the Philippines DEPARTMENT OF FINANCE Roxas Boulevard Corner Pablo Ocampo, Sr. Street Manila 1004 DOF JOINT ORDER No. 1-2010 April 5, 2010 Pursuant to the provision of Section 6 in relation to Sections 105, 106 and 149 of the National Internal Revenue Code (NIRC), Republic Act 9224 and Sec. 602 (a) of the Tariff and Customs Code of the Philippines (TCCP) in relation to Section 12 of the NIRC, the Commissioner of Internal Revenue and Commissioner of Customs hereby issue the herein regulations pertaining to the importation of automobiles, whether for personal use or for resale. I. Objectives: 1. To insure the proper collection of duties, VAT, excise tax and other charges due on imported automobiles by providing a uniform basis in the appraisal thereof. 2. To expedite the processing, release and registration of said automobiles by simplification of the procedures involved. II. Coverage: This regulation shall apply to all imported motor vehicles, whether or not subject to payment of duties, VAT, excise tax and other charges under the TCCP and Sec. 149 of the NIRC as amended by RA 9224 imported under the following conditions: acHDTA 1. Importation of brand new Completely Built Units which are allowed under CB Circular No. 92 Series of 1996. 2. Motor vehicles exempted from the coverage of Executive Order 156 and those automobiles imported under the no-dollar importation program administered by the DTI-BIS. 3. In case of duty and/or tax-free automobiles imported into the Philippines by person/s, entity/ies or agency/ies exempt from duty and/or tax which are subsequently sold or transferred or exchanged in the Philippines to non-exempt person or entities. 4. Importations under Section 105 of the Tariff and Customs Code of the Philippines, as amended. III. Definition of Terms: For purposes of this Joint Order, the following words and phrases shall have the meaning as indicated below: a. Automobile shall refer to any four (4) or more wheeled motor vehicle regardless of seating capacity, which is propelled by gasoline, diesel, electricity or any other motive power. Buses, trucks, cargo vans, jeeps, single cab, chassis and special purpose vehicles shall not be considered as automobiles. b. Special Purpose Vehicles shall refer to a motor vehicle other than trucks, cargo van, jeep/jeepney, bus, single cab chassis designed for specific application such as cement mixer, fire truck, boom truck, ambulance and/or medical unit and off-road vehicles for heavy industries and not for recreational activities. For this purpose, "designed for specific application" shall mean the motor vehicle is designed in such a manner that it can only be used strictly for the intended purpose for which it was manufactured. c. Brand New Automobiles an automobile shall be considered brand-new if the same is: 1. Of current or advance year model in the country of origin and/or manufacture; or 2. Year model of the immediately preceding year in the country of origin and/or manufacture provided that: a. The motor vehicle has a mileage of not more than 200 kms. and b. The motor vehicle has been acquired by the importer from the dealer as first owner. A brand new motor vehicle with year model of the immediately preceding year shall not be accorded any depreciation allowance. ACDTcE d. Personally-Owned Motor Vehicles and/or for Personal Use a motor vehicle shall be deemed personally-owned or for personal use if the invoice, bill of sale and bill of lading are made out in the name of a natural person provided that the number of units imported by that person shall not exceed two in any given twelve-month period. Should there be importations of automobiles made in the name of several buyers but represented by a single person/entity, such importation shall be deemed an importation of automobile for resale; therefore subject to ad valorem tax based on importer's selling price to be paid by such person/entity representing the individual buyers. e. Manufacturer's or Importer's Selling Price The net manufacturer's or importer's selling price shall refer to the price, net of excise and value added taxes, at which locally manufactured/assembled or imported automobiles are offered for sale by the manufacturer/assembler or importer to the dealers, or to the public directly or through their sales agents, as reflected in the manufacturer's/assembler's or importer's sworn statement duly filed with the BIR, or in their sales invoices/official receipts, whichever is higher, Provided, that in computing the manufacturer's/assembler's or importer's selling price, it shall always include the value of car airconditioner, radio and mag wheels including the cost of installation thereof whether or not the same were actually installed in the automobile. Provided, further, that in no case shall the manufacturer's/assembler's or importer's selling price be less than the amount computed as follows: 80% x (Suggested Retail Price - Excise Tax - Value-Added Tax). Provided, furthermore, that the manufacturer/assembler's or importer's selling price shall in no case be less than the cost of manufacture/assembly/importation plus the industry profit margin of ten percent (10%) and other expenses incurred before the automobiles are sold to the market, provided, finally that the suggested retail price shall not be less than the actual selling price of the automobiles when sold to the market. IV. Administrative Provisions: 1. The rate of duty, ad valorem , excise taxes and VAT shall be the rate of duty, excise taxes and VAT applicable under existing laws, regulations at the time of filing of entry. The rate of exchange shall be the rate as of the date of the filing of entry. 2. For purposes of arriving at the total landed value, the following procedures shall be adopted: 2.1 The proper description of the automobile pursuant to CAO 8-2007 shall be mandatory. 2.2 In the determination of the country of origin, the first (1st) digit of the vehicle's identification number or VIN or chassis number, shall be used as the basis thereof. i.e. US Manufacture Motor vehicles 1, 2, etc. European Manufactured V, W Japan manufactured J 2.3 The country of origin shall determine what book value shall be used in the valuation of the automobile, i.e. Japan Auto Guide Market Report (AGMR) US US Red Book Europe KARO Book Korea Korean Book China and Dubai Red Book Asia Pacific.com 3. In the case of brand-new automobiles which value is not yet provided in any of the applicable reference books, the value reflected in the Invoice shall be adopted in computing the duties, VAT and excise-tax due thereon. The subject automobile shall be tentatively released under CMO 37-2001 subject to the submission by the importer of a written undertaking that he shall voluntarily submit his imported automobile to post-entry audit and pay the additional duties, VAT and excise tax due should the same be warranted after audit. SEIDAC V. Operational Provisions: A. Importation of Personally-Owned Automobiles or Automobiles for Personal Use 1. Prior to assessment of the duty and taxes on the vehicle, including the computation of the excise tax, the Customs Examiner/Appraiser shall require the importer to present the Following documents: Accomplished Bill of Lading Invoice or Deed of Sale Packing List Income Tax Return or Audited Financial Statement (in case of corporations,) to buy/import such automobile Affidavit or sworn statement stating that the imported motor vehicle is personally-owned and/or for personal use and shall not be disposed through sale or barter within three (3) years from the date of its importation and that importer undertakes to pay the adjusted excise tax due on said motorcycle should the same be disposed through sale or barter within the prohibited three-year period. 2. The assigned Customs Examiner/Appraiser shall examine the vehicle indicating the proper description as required under CAO 8-2007 and stencil the chassis and engine numbers as provided under existing procedures. 3. The appraisal of imported personally-owned automobiles or those for personal use, for purposes of computing the duties, taxes, excise tax and other charges due thereon, shall be the invoice/transaction value or the book value, whichever is higher without prejudice to the importer availing of the provisions of CMO 37-2001 on tentative release and appeal to the Valuation and Classification Review Committee (VCRC) of the BOC. 4. Depreciation, if applicable, shall be computed using the straight line method of 10% for every year but in no case shall it exceed 50%. In case of damage as reflected in the entry a standard/reasonable percentage may be allowed depending on the facts obtaining in each particular case. 5. To expedite the processing of imported personally owned automobiles and/or those for personal use, the requirement of an Authority to Release Imported Goods (ATRIG) shall be dispensed with. The total landed value shall be used as the taxable base for purposes of computing the excise tax due which shall be determined pursuant to the provisions of this Order. 6. All personally-owned automobiles and/or automobiles for personal use shall be subject to 100% examination before release from the custody of the Bureau. 7. Payment of the assessed duties, taxes, excise taxes and other charges and the issuance of the Certificates of Payment (CP) and their transmittal to the Land Transportation Office (LTO) shall follow the current procedures under existing rules and regulations. cEaACD 8. The BOC shall request the LTO that prior to the release of the Certificate of Registration (CR) for the subject motor vehicle, the same shall be annotated that the automobile covered by the CR shall not be sold or disposed within three (3) years from the date of its importation and that any sale or other mode of disposition within the three-year period shall be subject to the payment of the adjusted excise tax due thereon as may be computed by the BIR. 9. It is understood that the import clearance processing of personally-owned automobiles or those for personal use shall still be subject to compliance with other standards requirements applicable to a given importation, e.g., BIS authority for used motor vehicles, emission test, etc. B. Importation of Automobiles for Sale 1. Prior to assessment of the duty, VAT and excise taxes due, the Customs Examiner/Appraiser shall require the importer to present the following documents: Bill of Lading Invoice or Deed of Sale Packing List Manufacturer's/Importer's Selling Price 2. All importation of automobiles for sale shall not be released from customs custody without payment of ad valorem tax and the appropriate Authority to Release Imported Goods (ATRIG) duly issued by the BIR office having jurisdiction over the importer's principal place of business. 3. To optimize the collection of revenues due, the BIR shall, every six months, provide the BOC with copies of the Manufacturer's/Importer's Sworn Statement filed to countercheck the veracity of the invoice/transaction value declared by the importer. 4. In the case of amended Sworn Statements, the same shall be provided the BOC within five (5) days from the filing thereof with the BIR office having jurisdiction. VI. Joint Reconciliation by BOC and BIR 1. A Joint Committee shall be created composed of BOC and BIR personnel from the following offices: a. BOC Representative from the Office of the Deputy Commissioner, AOCG Chief, Value and Classification Division Chief, Certificate of Payment Encoding and Verification Office Chiefs, Formal Entry Divisions of Port of Manila and MICP Chiefs, Section 5 (Motor Vehicles) of POM and MICP b. BIR Representative from the Office of the Commissioner Chief, National Investigation Division Excise Tax Division 2. The Joint Committee shall meet on a quarterly basis or as may be needed and submit their findings to the Secretary of Finance, copy furnished the Presidential Adviser on Revenue Enhancement which finding shall include the valuations of automobiles for the assessment and payment of the duties, VAT, excise taxes and other charges to ensure that the collection efforts of the government are maximized. cCHITA 3. The valuations submitted by the Joint Committee shall be used by the Bureau of Customs and the Bureau of Internal for a uniform basis in the computation of the duties, VAT and excise-tax due on all imported automobiles. VII. Separability Clause Provisions of existing rules and regulations in conflict with the provisions of this Order are hereby amended or repealed accordingly. VIII. Effectivity This Order shall take effect fifteen (15) days after its publication. Recommending Approval: (SGD.) NAPOLEON L. MORALES Commissioner, BOC (SGD.) JOEL TAN-TORRES Commissioner, BIR Approved by: (SGD.) MARGARITO B. TEVES Secretary" All concerned are hereby enjoined to be guided accordingly and give this Circular a wide publicity as possible. (SGD.) JOEL L. TAN-TORRES Commissioner of Internal Revenue ANNEX A Description Year Series Book * Value in Model US Dollars (US$) AUDI Audi 2009 A3 1.4 Base 23,232.30 Audi 2009 A3 Sportsback 1.6 Base 24,306.10 Audi 2009 A4 1.6 Base 28,567.50 Audi 2009 A5 2.0 Base 44,626.40 Audi 2009 A6 2.0 Base 37,087.70 Audi 2009 A6 2.4 Standard 38,672.40 Audi 2009 A8 3.0 Standard 73,193.90 Audi 2009 Q5 2.0 Base 48,360.00 Audi 2009 Q7 Base 52,764.40 Audi 2009 R8 80,129.40 Audi 2009 TT Base 45,760.00 Audi 2009 TT 1.8 Base 31,379.40 Audi 2009 TT 2.0 Base 35,777.30 CHEVROLET Aveo Notch Back 2009 1.4L AT 12,383.17 Aveo Notch Back 2009 1.4L MT 11,460.00 Aveo Notch Back 2009 1.4L MT Base 11,460.00 Suburban 4x2 9-seater 2009 Suburban 46,446.13 CHRYSLER Chrysler 2009 300C 2.7 30,645.83 Chrysler 300C Base 2009 300C 3.5 34,170.00 Chrysler 2009 300C SRT8 48,145.83 Chrysler 2009 300C 2.7 Base 36,535.00 Chrysler 2009 300C 5.7 Hemi 40,791.67 Chrysler 2009 300C 6.1 RTS 48,145.83 Town and Country 2009 Base 25,730.00 Town and Country 2009 Limited Edition 36,530.00 Town and Country 2009 Touring 29,187.50 DISCOVERY Discovery 3 2009 TDV6 2.7L HSE LHD/AT 58,336.20 Discovery 3 2009 V8 HSE LHD/AT 68,455.70 Discovery 4 2009 3.0L TDV6 HSE LHD/AT 58,336.20 DODGE Durango Base 2009 Durango Base 30,765.00 Durango 4.7 2009 Durango 4.7 35,645.83 Durango Hemi 2009 Durango Hemi 39,285.00 Durango 5.7 Hemi 2009 Durango 5.7 Hemi 44,540.00 Journey 2.7 2009 Journey 2.7 29,854.17 Journey Base 2009 Journey Base 19,360.00 Nitro 3.7 SXT 2009 Nitro 3.7 SXT 26,479.17 Nitro 2009 Nitro 26,479.17 Nitro Base 2009 Nitro Base 21,440.00 FREELANDER Freelander 2i6 2009 3.2 ltr HSE LHD/AT 49,159.50 Freelander 2is 2009 3.2 ltr HSE LHD/AT 49,159.50 Freelander 2 2009 TDA SE LHD/AT 40,966.90 Freelander 2 2009 TDA HSE LHD/AT 44,244.20 JAGUAR Jaguar XF 2009 3.0 V6 Luxury 63,960.00 Jaguar XF 2009 V8 S/C XFR LHD/AT 71,905.03 Jaguar X-Type 2009 2.5 SE LHD/AT 43,041.70 JEEP Commander 2009 Commander 41,745.00 Commander Base 2009 Commander Base 28,480.00 Commander Hemi 2009 Hemi 45,210.00 Commander Limited 2009 Commander Limited 37,485.00 Grand Cherokee 2009 Grand Cherokee 48,145.83 Grand Cherokee Base 2009 Grand Cherokee Base 34,996.51 Wrangler 2-Door 2009 Wrangler 2-Door 30,312.50 Wrangler Base 2009 Base 21,654.27 Wrangler Unlimited 2009 Unlimited 31,465.00 Wrangler Rubicon 2009 Rubicon 30,312.50 KIA Carens 2009 7P 2.0 EX DSL 15,762.26 Carens 2009 7P 2.0 LX DSL AT 14,928.42 Carens 2009 7P 2.0 LX DSL AT 14,126.64 Carnival SP 2.9 LWB 2009 DSL EX A/T 20,689.03 Carnival 8P Longbody 2009 DX AT 20,689.03 Carnival 8P Longbody 2009 LX Diesel AT 17,532.58 Carnival 8P Shortbody 2009 LX DSL MT 15,890.55 RIO 4-door 2009 1.4EX AT 11,495.00 RIO 4-door 2009 1.4EX MT 11,495.00 RIO 4-door 2009 1.4LX MT 13,225.00 Sorento7P 2.4L GSL EX 2009 4x2 A/T 23,345.00 Sorento7P 2.4L GSL EX 2009 4x4 27,245.00 Sorento2.5L DSL 5P 2009 4x4 M/T (Training Model) 24,645.00 Soul 1.6 2009 GSL A/T 13,300.00 Soul 2.0L 2009 GSL A/T 16,255.00 Soul 2.0L 2009 GSL M/T 16,255.00 LAND ROVER Defender 2009 90SW LHD/MT 28,622.10 Defender 2009 110 SW Dsl LHD/MT 32,554.60 MERCEDES BENZ Mercedes Benz 2009 B150 CST 25,562.50 Mercedes Benz 2009 B170 Base 27,040.00 Mercedes Benz 2009 B170 CST Sports 32,312.50 Mercedes Benz 2009 C63 Base 74,100.00 Mercedes Benz 2009 C63 Advantgarde AMG 80,291.67 Mercedes Benz 2009 C150 Base 25,220.00 Mercedes Benz 2009 C170 Base 27,040.00 Mercedes Benz 2009 C180 Base 30,095.00 Mercedes Benz 2009 C180 Classic 35,666.67 Mercedes Benz 2009 C200 Base 31,720.00 Mercedes Benz 2009 C200 Elegance 41,750.00 Mercedes Benz 2009 C200 Avantgarde 41,750.00 Mercedes Benz 2009 C280 Avantgarde 48,458.33 Mercedes Benz 2009 C350 Base 38,805.00 Mercedes Benz 2009 C350 Avantgarde 53,687.50 Mercedes Benz 2009 E300 Avantgarde 61,520.83 Mercedes Benz 2009 E300 Base 55,055.00 Mercedes Benz 2009 E350 Base 54,080.00 Mercedes Benz 2009 E300 Elegance 58,500.00 Mercedes Benz 2009 ML350 Base 56,485.00 Mercedes Benz 2009 S350 Long 97,125.00 Mercedes Benz 2009 S500 Base 101,400.00 Mercedes Benz 2009 S500 Premiere 119,041.67 Mercedes Benz 2009 SLK 200 Base 39,260.00 Mercedes Benz 2009 CLS 350 Base 60,905.00 Mercedes Benz 2009 CLS 350 Coupe 77,875.00 Mercedes Benz 2009 E200 Classic 48,458.33 Mercedes Benz 2009 E200 Classic Sport 51,458.33 Mercedes Benz 2009 E280 Base 46,345.00 Mercedes Benz 2009 E280 Avantgarde 60,520.83 Mercedes Benz 2009 E280 Avantgarde Sport 61,520.83 Mercedes Benz 2009 E280 Avantgarde AMG 64,541.67 Mercedes Benz 2009 E280 Elegance 57,500.00 MINI COOPER Mini Cooper 1.6 2009 Clubman ML31 21,782.11 Mini Cooper 1.6 2009 Convertible A/T MR31 24,896.39 Mini Cooper 1.6 2009 H.B. AT/MF-31 19,850.92 Mini Cooper 1.6 2009 H.B. MT/MF-31 19,276.00 Mini Cooper 1.6S 2009 Clubman A/T MM-31 26,543.28 Mini Cooper 1.6S 2009 Convertible A/T MS 31 28,559.20 Mini Cooper 1.6S 2009 H.B. A/T MF 71 24,098.86 Mini Cooper 1.6S 2009 H.B. M/T MF 71 23,705.66 Mini Cooper 1.6S 2009 JCW M/T MF91 23,099.22 PORSCHE Porsche 2009 Boxster 49,237.50 Porsche 2009 Carrera 87,327.50 Porsche 2009 Cayenne 53,397.50 Porsche 2009 Cayenne Base 56,517.50 RANGE ROVER Range Rover FS 2009 TDV8 HSE LHD/MT 86,849.10 Range Rover FS 2009 V8 S/C LHD/AT 86,849.10 Range Rover Sport 2009 TDV6 SE LHD/AT 65,436.80 Range Rover Sport 2009 TDV8 HSE LHD/AT 83,462.60 Range Rover Sport 2009 TDV8 SE LHD/AT 75,923.90 Range Rover Sport 2009 V8 4.2L S/C LHD/AT 91,546.00 Range Rover Sport 2009 V8 5.0L SC/LHD/AT 91,546.00 SANGGYONG Rexton 2009 Rexton 23,482.14 SUBARU Subaru Forester 2009 2.0D A/T 21,000.00 Subaru Forester 2009 2.0X A/T 19,500.00 Subaru Forester 2009 2.5X A/T 20,022.52 Subaru Impreza 2009 2.0 STI Sedan M/T GDBG4 34,800.00 Subaru Impreza 2009 2.0R Hatchback A/T 15,853.59 Subaru Impreza 2009 2.0R Hatchback M/T 32,800.00 Subaru Impreza 2009 2.0 Sedan A/T 14,400.00 Subaru Impreza 2009 2.5 WRX-STI Hatchback M/T 32,800.00 Subaru Impreza 2009 2.5 WRX Hatchback M/T 25,500.00 Subaru Impreza 2009 2.5 WRX-Sedan M/T 32,800.00 Subaru Legacy 2009 2.5 A/T Sedan 26,595.00 Subaru Legacy 2009 2.5 A/T Wagon 32,095.00 Subaru Legacy 2009 3.6 A/T Sedan 29,995.00 SUZUKI Suzuki Jimmy 2009 JLX A/T 12,269.00 Suzuki Jimmy 2009 JLX M/T 18,343.24 Suzuki Grand Vitara 2009 JB420W A/T 19,856.15 Suzuki Grand Vitara 2009 JB424W A/T 4x2 23,119.37 Suzuki Grand Vitara 2009 JB627W A/T 19,349.00 Suzuki Grand Vitara 2009 JB632W A/T 24,849.00 Suzuki Swift 2009 SX4 Hatchback M/T 14,200.00 TOYOTA Aveo Hatchback 2009 1.4L A/T 12,283.17 Aveo Hatchback 2009 1.4L M/T 11,460.00 Aveo Hatchback 2009 1.4L M/T Gas 11,460.00 Camry 2009 2.4G A/T 25,000.00 Camry 2009 2.4V A/T (KA) 25,335.63 Camry 2009 2.4V A/T (KB) 25,521.65 Camry 2009 3.5Q A/T 29,613.90 Corolla Altis 2009 1.6E M/T 19,949.00 Corolla Altis 2009 1.6G M/T (NT) 19,949.00 Corolla Altis 2009 1.6G M/T (NU) 19,949.00 Corolla Altis 2009 1.6V A/T (NY) 19,949.00 Corolla Altis 2009 1.6V A/T (NZ) 19,949.00 Corolla Altis 2009 2.0V (MA) 22,863.00 Corolla Altis 2009 2.0V (MB) 22,863.00 Fortuner 2009 4x2G Gas A/T (TD) 24,800.00 Fortuner 2009 4x2G Dsl M/T (WB) 24,800.00 Fortuner 2009 4x4V Dsl A/T (TA) 26,900.00 Lexus Sedan 2009 ES350 48,645.13 Lexus Sedan 2009 GS460 65,490.83 Lexus (4-Seater) 2009 LS460L 95,938.67 Lexus (5-Seater) 2009 LS460L 85,789.40 Lexus Wagon 2009 LX570 85,226.23 Lexus Wagon 2009 2X350 53,772.08 Privia 2009 35,313.83 Privia 2009 32,862.46 RAV 4 2009 4x2 23,608.35 RAV 4 2009 4x4 28,165.65 Yaris 2009 1.5 A/T 13,035.71 Yaris 2009 1.5 M/T 12,900.00 VOLVO VOLVO 2009 C30 2.0 22,584.33 VOLVO 2009 C30 2.4 24,312.55 VOLVO 2009 C30 T5 29,965.99 VOLVO 2009 S40 2.0 24,385.63 VOLVO 2009 S60 2.4L (T-TEC) 25,514.99 VOLVO 2009 S80 2.5T 39,386.16 VOLVO 2009 XC60 D5 41,950.47 VOLVO 2009 XC60 T6 48,441.69 VOLVO 2009 XC70 DA5 45,442.24 VOLVO 2009 XC70 3.2 43,511.64 VOLVO 2009 XC90 3.2 48,098.73 VOLVO 2009 XC90 D5 50,609.89 VOLVO 2009 V50 2.0 24,943.67 XKR 5.0 2009 S/C Coupe LHD A/T 106,512.90