Revenue Regulations (RR) No. 24-2018 was issued by the bureau amending Section 9 of RR No. 25-2003 Relative to the Determination by the Department of Energy Whether the Automobiles Subject to Excise Tax Exemption are Hybrid or Purely Electric Vehicles pursuant to the Provisions of Republic Act No. 10963, Otherwise known as the "Tax Reform for Acceleration and Inclusion (TRAIN) Law".
SECTION 2. Purpose of Regulations - The purpose of these Regulations is to amend/revise the guidelines and procedures for the processing of the request for tax exemption of Hybrid or Purely Electric Vehicles by the DOE, consistent with the objective of promoting the ease of doing business and efficient delivery of government service under Republic Act (RA) No. 11032. During the inter-agency consultation called by the DOE with representatives from BIR, DOF and BOC, the DOE proposed that the BIR could use as a basis the current Department of Environment and Natural Resources (DENR) system of issuing a Certificate of Conformity (COC) for new motor vehicles in determining with high level of confidence the vehicle classification as Hybrid or Purely Electric Vehicles (HEV/EV) as defined under RA No. 10963. The actual inspection or separate validation of vehicle by the DOE to verify whether the automobile is an HEV/EV is a clear duplication of an existing DENR issuance of COC for new locally manufactured or imported vehicles.
SECTION 3. Further Amending Section 9(E) of RR. No. 25-2003 - Section 9(E) of RR No. 25-208 is further amended to read as follows:
"SEC. 9. TAX-EXEMPT REMOVALS OF AUTOMOBILES. The following removals of locally manufactured/assembled or release of imported automobiles from the place of production or from customs custody, respectively, are exempt from the payment of the appropriate excise taxes subject to certain conditions.
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E. Purely Electronic Vehicles shall be exempt from the Excise Tax on Automobiles, Hybrid Vehicles shall be subject to Fifty Percent (50%) of the applicable Excise Tax Rates on Automobiles. Prior to the removal of the automobiles from the manufacturing plant or customs custody, the Commissioner of Internal Revenue (CIR), Attention: Chief, Excise Large Taxpayer Regulatory Division (ELTRD) shall require from the Motor Vehicle Manufacturer/Assembles/Importer the Presentation/Submission for the Certificate of Conformity (COC) issued by the DENR-Environment Management Bureau (EMB) which contains information of the vehicle's model/make and other Technical Specification/Information, including the corresponding classification on Fuel Feed from which it can be ascertained whether the Vehicle is a Hybrid Electric Vehicle (HEV).
In case the Subject of the Application for COC is a Purely Electric Vehicle (EV), a Certificate Of Non-coverage (CONC), TNSTEAD of COC, shall be presented to the ELTRD by the Manufacturer/Assembler/Importer, stating therein that the Vehicle applied for COC is a Purely Electric Vehicle (EV) and has no Tailpipe Emission and therefore not covered RA No. 8749 (PHILIPPINES CLEAN AIR Act).
The BIR shall make a determination whether the EV or HEV is Exempt from Excise Tax or Subject to 50% Excise Tax, respectively, on the Basis of the CONC or COC issued by the DENR-EMB as presented by the Manufacturer/Assembler/Importer.
For purposes of validating the Authenticity of the COC OR CONC presented by the Vehicle Manufacturer/Assembler/Importer, The DENREMB shall provide the BIR a Certified True Copy of the COC AND CONC issued to the Manufacturer/Assembler/Importer for New Locally Manufactured or Imported HEV OR EV.
