Customs issues guidelines on imported motor vehicles

MANILA, Philippines - Bureau of Customs (BOC) releases guidelines on imported motor vehicles;

Buying second-hand imported vehicles, such as those owned by embassies and diplomats, might come cheap but look out for the taxes, warned the Bureau of Customs (BOC).

In a statement, Customs Commissioner Angelito Alvarez said yesterday they recently issued the Depreciation Guidelines on Imported Motor Vehicles that covers a set of guidelines that determines the rate of depreciation for tax and duty-free privilege motor vehicles that are to be publicly disposed, sold or even donated to parties not enjoying tax and duty-free privileges.  

For tax-exempt vehicles, such as those used by diplomats and consular offices, Alvarez said the rate of depreciation would follow the straight line method at 10 percent every year. So a two-year old vehicle will be assessed a depreciation rate at 20 percent, a three-year old at 30 percent, and so on until it reaches the maximum limit of 90 percent of the vehicle price.

For the purpose of computing the ad valorem for tax-exempt vehicles, where the value is based on the depreciated rate at the time of sale or transfer, the depreciation rate shall also be at 10 percent every year but the total amount of depreciation shall not exceed 50 percent of the original cost or value.

The same rule applies for the “No-Dollar Importation of Motor Vehicles”, that shall follow a straight line computation method with an annual depreciation value of 10 percent. Depreciation value on the 5th year and onwards is pegged at a maximum of 50 percent.

The No-Dollar Importation of Motor Vehicles program is a special privilege given by the government to returning residents and other qualified individuals to bring motor vehicles into the country for personal use under certain conditions.