Revenue Regulations No. 001-2025

Further Amending Section 9 of Revenue Regulations No. 25-2003 Relative to the Documentary Requirements to be Submitted by Motor Vehicle Manufacturer/Assembler/Importer as Basis for the Bureau of Internal Revenue to Determine 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 1 Scope – Pursuant to the provisions of Sections 244 and 245 of the National Internal Revenue Code of 1997 (NIRC), as amended, in relation to Section 84 of the Republic Act No. 10963, otherwise known as the “TRAIN LAW”, these Regulations are hereby promulgated to further amend Section 9 of Revenue Regulations (RR) No. 25-2003, as Natural Resources – Environment Management Bureau (DENR-EMB) to determine whether the automobiles subject to excise tax exemption are hybrid or purely electric vehicles pursuant to the provisions of TRAIN LAW.

Section 2 Purpose of Regulations – To amend/revise the guidelines and procedures for the processing of the request for tax exemption of Hybrid or Purely electric Vehicles. Currently, RR No. 25-2003, as amended by RR No. 24 -2018, assigns the determination of whether an automobile is Hybrid or Purely Electric to DENR – EMB by recognizing the Certificate of Conformity (COC) and Certificate of Non-Coverage (CONC) they issue as the basis for classification of automobiles by the Bureau of Internal Revenue (BIR). During the inter-agency consultation called by the Department of Finance with representatives from Department of Energy (DOE), DENR-EMB, and BIR, DOE proposed that the determination of whether an automobile is Hybrid or Purely Electric be reverted to the DOE as originally assigned by RR No. 5-2018.

Section 3 Further Amending Section 9 (E) of RR No. 25-2003 – Section 9 (E) of RR No. 25-2003, as amended, is further amended, is further amended to read as follows:

” Sec 9 – Tax-Exempt Removals of Automobiles – The following removals of locally manufactured/assembled or released of imported automobiles form the place of production or from customs custody, respectively, are exempt from the payment of the appropriate excise taxes, subject to certain conditions.

E. PURELY ELECTRIC VEHICLES SHALL BE EXEMPT FORM EXCISE TAS ON AUTOMOBILES. HYBRID VEHICLES SHALL BE SUBJECT TO FIFTY PERCENT (50%) OF THE APPLICABLE EXCISE TAX. PRIOR TO THE REMOVAL OF THE AUTOMOBILES FROM THE MANUFACTURING PLANT OR CUSTOMS CUSTODY, THE COMMISSIONER OF INTERNAL REVENUE (CIR) SHALL REFER TO THE ELECTRIC VEHICLE RECOGNITION LIST PUBLISHED BY THE DEPARTMENT OF ENERGY (DOE), WHICH CONTAINS THE INFORMATION AND CLASSIFICATION FOR BATTERY ELECTRIC VEHICLES (PURELY ELECTRIC VEHICLE/BEV), PLUG-IN HYBRID ELECTRIC VEHICLES (PHEV), AND HYBRID ELECTRIC VEHICLES (HEV).

THE BIR SHALL MAKE A DETERMINATION WHETHER THE AUTOMOBILE IS EXEMPT FROM EXCISE TAX OR SUBJECT TO 50% EXCISE TAX, RESPECTIVELY, ON THE BASIS OF THE DOE’S LIST OF RECOGNIZED ELECTRIC VEHICLES, PUBLISHED ON ITS WEBSITE, WITHOUT PREJUDICE TO THE BIR’S AUTHORITY TO CONDUCT ANY POST-VERIFICATION ASSESSMENT OF THE AUTOMOBILES.

FOR PURPOSES OF KEEPING UP TO DATE WITH THE LATEST PUBLICATIONS OF THE LIST OF RECOGNIZED ELECTRIC VEHICLES, THE DOE SHALL FURNISH THE BIR WITH A CERTIFIED TRUE COPY OF AN UPDATED LIST OF RECOGNIZED ELECTRIC VEHICLES.”