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                                     SEC. 5. 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 air conditioner, radio, mag wheels including the cost of installation thereof
            whether or not the same were actually installed in the automobile. It shall include other
            accessories deemed necessary due to advancement on technology which were installed
            or for installation per sales agreement such as but not limited to: leather seats, air bags,
            cruise control, safe exit warnings, remote parking systems, live blind spot videos feeds,
            front back and overhead cameras, wireless smartphone connectivity and charging,
            emergency service/stolen vehicle tracking software, front and rear parking sensors, lane
            departure warnings, push button start, navigation system, airbags – basic and additional,
            etc. 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 (Actual Dealer’s Suggested Selling Price – Excise Tax – Value-Added Tax).
            Provided, furthermore, that the manufacturer’s/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.
           The value of other factory-installed accessory or optional equipment such as wheel
           covers, or any other attachment installed on the unit removed or sold, or previously
           removed and returned for purposes of installation thereof, as well as the costs of
           installation of the accessory, shall likewise form part of the manufacturer’s/assembler’s
           or importer’s selling price. In cases where accessories are installed outside the
           production/assembly plant or after the release from the customs custody but before the
           actual sale of the imported automobile, as the case may be, the costs of such accessories
           and the cost of the installations shall form part of the expenses of the
           manufacturer/assembler or importer, all subsequent billings therefor by the
           manufacturer/assembler or importer to the dealer or customer shall form part of the
           selling price.”
             Based on the above provisions, there are three (3) primary taxable bases in applying the
Excise Tax rates for automobiles, namely:
           a. Declared manufacturer’s or importer’s selling price, net of Excise and Value-Added
               Taxes;
           b. Based on the 80% actual dealer’s price, net of Excise and Value-Added Taxes; and
           c. Based on the total cost of importation and expenses divided by 90%.
             The taxable bases are reflected in the Manufacturer’s/Assembler’s and Importer’s Sworn Statement prescribed in Annex A of Revenue Memorandum Circular No. 58-2003 where the Excise Tax shall be computed using the highest identified taxable bases integrating the value of car air conditioner, radio and mag wheels including the cost of installation, as well as the value of other factory-installed accessory or optional equipment such as wheel covers, or any other attachment installed on the unit removed or sold, as the case may be.
               Sample scenarios were provided in the Circular to illustrate the required procedure in determining the tax base for Excise Tax and VAT computation. The different tax base was reflected in the said scenarios depending on the circumstances of the case where computation must be made to arrive at the required values for selection of the highest value as the tax base
for taxation purposes.
                   No Authority to Release Imported Goods (ATRIG) shall be issued for importation of automobiles without computing the three (3) tax base to clearly show that the Excise Tax was based on whichever is higher of the (3) values mandated under existing issuances. All issued ATRIGs shall be reconciled by Excise Large Taxpayer Field Operations Division with the removal per Excise Taxpayer’s Removal Declaration and stock inventory per Official Register Book. Said office shall also conduct product validation of the manufactured/ imported/assembled automobiles registered with the Land Transportation Office which mandatorily issues conduction sticker for automobiles. This is in accordance with the Monitoring, Supervision and Reporting of Excisable Products under Revenue Administrative Order No. 2-2014, Large Taxpayer Service II.C.1-6.