Implementing Executive Order No. 838, thereby amending Revenue Regulations No. 7-78, sales tax regulations on automobiles

October 27, 1982 REVENUE REGULATIONS NO. 08-82 SUBJECT : I mplementing Executive Order No. 83 8, Thereby Amending Revenue Regulations No. 7-78, Sales Tax Regulations on Automobiles TO : All Internal Revenue Officers and Others Concerned P ursuant to the provisions of PD 1357 and Executive Order No. 838 in relation to Section 32 6 and Section 4, both of the NIRC of 1977, as amended, these regulations are hereby promulgated. SECTION 1 . New Sales Tax Rates on Automobile . Section 3 (A) (2) of Revenue Regulations No. 7-78 is hereby amended to read as follows: " Rates of tax in determining the gross sales tax due on locally manufactured automobiles . The rates of tax are as follows: "Suggested Retail or Lease Price or Actual Retail Rate of Sales Price, Whichever is Higher Tax Due "Not over P65,000 15% "Over P65,000 but not over P85,000 25% "Over P85,000 but not over P120,000 35% "Over P120,000 45%'" SECTION 2 . Applicability of Old and New Rates . The old rates of sales tax imposed under Section 195(A) of the Tax Code, as amended by Presidential Decree No. 1357, shall be applied on sales made by manufacturers-assemblers of automobiles on or before October 19, 1982. Sales of automobiles made on or after October 20, 1982 shall be subject to the new rates prescribed by Executive Order No. 838. SECTION 3 . Tax Treatment of Dealer's Inventory as of October 19, 1982 . Automobiles on hand and in the possession of dealers as of October 19, 1982, the taxes of which had already been paid under the old rates by the manufacturers-assemblers shall be inventoried by its dealer and the sales tax thereon shall be redetermined under the new rates prescribed under Executive Order No. 838. To conform with the objectives of Executive Order 838, the selling price of the inventory of automobiles, the tax of which had been paid under the old rates, must be adjusted and the assembler-manufacturer shall be entitled to credit an amount representing the excess of the sales tax paid on the inventory under Presidential Decree No. 1357 over the amount of sales tax under the new rates prescribed by Executive Order No. 838, against the sales tax liability of the manufacturer-assembler. The excess sales tax paid shall be claimed as a tax credit and processed in accordance with the existing procedures of processing sales tax credits. SECTION 4 . Effectivity . This Revenue Regulations shall take effect immediately. CESAR VIRATA Minister of Finance Recommending Approval: RUBEN B. ANCHETA Acting Commissioner