The Bureau of Customs (BOC) has released a new order that simplifies and unifies the computation of duties, taxes, and other charges for brand-new and used automobiles.
BOC, through Customs Memorandum Order No. 29-2014, said the revised computation ensures the properly implementation of the Bureau of Internal Revenue’s revenue regulation for computing ad valorem taxes for automobiles.
Dated December 22, 2014 the new order, which repeals CMO 13-2014, also aims to enhance collection of government revenue with a uniform basis for treating trade discounts and applying the depreciation allowance to used vehicles.
CMO 29-2014 covers brand-new cars consigned to car manufacturers, dealers, and natural persons. It also encompasses used cars consigned to the following: returning Filipino diplomats or Department of Foreign Affairs officials; returning Filipino residents who have resided abroad for one year (accumulated within three years of stay and/or preceding the date of filing for the certificate of authority to import at the Bureau of Import Services); and immigrants holding 13A or 13G visas or those with dual citizenships, provided a prior certificate of authority to import has been issued by the Department of Trade and Industry prior to exportation.
The order also covers used automobiles under the local purchase scheme, sold by privilege (duty/tax exempt) persons to non-privilege (non-duty/tax exempt) individuals, or sold by privilege persons to privilege individuals.
The computation format will depend on the automobile category.
Recently, BOC likewise revised the depreciation schedule for imported vehicles. Under Customs Administrative Order No. 07-2014, which replaces CAO 05-2011, the rate of depreciation for tax-exempt vehicles will be computed based on the straight line method of 10% for every year but not exceeding 50%, instead of the uniform 90% under CAO 05-2011.
For used trucks and heavy equipment, the rate of depreciation should also follow the straight line method of 10% for every year but not exceeding 50%, instead of 90%. – Roumina Pablo
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