THE Bureau of Internal Revenue (BIR) has transferred to the Department of Energy (DoE) the authority to classify automobiles as electric vehicles (EVs) or hybrids, which will determine eligibility for an excise tax exemption.
“During the inter-agency consultation called by the Department of Finance (DoF) with representatives from Department of Energy, Department of Environment and Natural Resources-Environmental Management Bureau (DENR-EMB), and the BIR, the 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,” the BIR said in a Revenue Regulations 001-2025.
Currently, the determination of whether an automobile is hybrid or purely electric is the responsibility of the EMB, which issues Certificates of Conformity and Certificates of Non-Coverage.
Under the Tax Reform for Acceleration and Inclusion law, or Republic Act No. 10963, electric vehicles are fully exempt from the excise tax on vehicles, while hybrid automobiles are 50% exempt.
Under the new setup, the BIR will collect the appropriate excise based on the electric vehicle recognition list published by the DoE.
The list contains the information and classifications for battery electric vehicles, or purely electric vehicles, plug-in hybrid electric vehicles, and hybrid electric vehicles. — Aaron Michael C. Sy