The car import tax in the Philippines usually totals between 40% and more than 100% of a vehicle’s declared value, built from three stacked levies: a customs duty of 20% or 30%, an excise tax of 4% to 50% tied to price, and a 12% value-added tax calculated on top of the other two. The compounding is what makes the final bill so much larger than any single rate suggests.
Can You Even Import the Car?
Before running numbers, check whether the vehicle is allowed in. Executive Order 156 prohibits the importation of most used motor vehicles.1Tariff Commission. Executive Order 156 The narrow exceptions are returning residents or immigrants (one personally owned vehicle per family under a No-Dollar Importation authority, with no resale for three years), diplomatic corps vehicles authorized by the DFA, trucks of 2.5 tons gross vehicle weight or more (excluding pickups), buses of 6 tons or more, and special-purpose vehicles such as ambulances, fire trucks, hearses, crane lorries, concrete mixers, and tow trucks.
Returning residents also face vehicle-specific limits: left-hand drive, no more than 3,000 kilograms gross vehicle weight, registered in the importer’s name for at least six months before applying, plus a Certificate of Roadworthiness and Emission Compliance from the country of origin, authenticated by the Philippine Embassy.2Bureau of Customs. Motor Vehicles, Boats and Yachts Used vehicles outside these categories need an import permit from the DTI’s Fair Trade Enforcement Bureau, filed before shipping.3World Trade Organization. Import Licensing Procedures A used vehicle brought in without qualifying is seized, destroyed, and the importer faces perpetual disqualification plus possible smuggling prosecution.4University of the Philippines Law Center. Customs Administrative Order No. 10-2020 Brand-new vehicles can be imported freely by anyone, no prior import authority required.
Customs Duty: The First Layer
Customs duty is charged on the CIF value, meaning the purchase price plus insurance plus freight. Two rates apply, based on seating capacity:
- 30% for vehicles designed to seat nine or fewer people, including the driver. This covers most passenger cars, SUVs, and crossovers.
- 20% for vehicles designed to seat ten or more, including the driver, such as vans and minibuses.
These come from ASEAN Harmonized Tariff Nomenclature headings 87.03 and 87.02.5Bureau of Customs. CMO No. 29-2014 – Revised Computation of Duties Taxes and Other Charges for Automobiles Vehicles originating in other ASEAN member countries may qualify for preferential or zero rates under the ASEAN Trade in Goods Agreement with a valid Certificate of Origin.
Excise Tax: Where the Price Really Matters
Excise tax (also called ad valorem tax) sits on top of customs duty and is based on the net manufacturer’s or importer’s selling price. The brackets set by the TRAIN Law remain in force:6Senate of the Philippines. Republic Act No. 10963 – Tax Reform for Acceleration and Inclusion (TRAIN) Law
- Up to PHP 600,000: 4%
- Over PHP 600,000 to PHP 1,000,000: 10%
- Over PHP 1,000,000 to PHP 4,000,000: 20%
- Over PHP 4,000,000: 50%
The cliff at PHP 4 million catches people. A vehicle priced at PHP 3.9 million pays 20%; one priced at PHP 4.1 million pays 50%. A small difference in declared price near a bracket line can swing the tax bill by millions.
Who Pays Less or Nothing
Purely electric vehicles are exempt from excise tax under the TRAIN Law, a benefit reinforced by the Electric Vehicle Industry Development Act.7Lawphil. Republic Act No. 11697 – Electric Vehicle Industry Development Act Pickup trucks are also exempt. Hybrids pay half the otherwise applicable rate, so a hybrid priced in the PHP 1–4 million bracket pays 10% rather than 20%.
VAT and the Stacking Effect
Value-added tax is 12%, but the base is not the CIF value. It is the CIF value plus customs duty plus excise tax plus other charges.8Bureau of Customs. Tax Estimator You pay tax on tax. That compounding is the single biggest reason the final bill looks nothing like a simple sum of the headline rates.
Fixed Fees on Top
Beyond the three main taxes, budget for:
- Documentary stamp fee of PHP 265 for motor vehicle importations.2Bureau of Customs. Motor Vehicles, Boats and Yachts
- Import processing charge of PHP 250 to PHP 2,000 depending on dutiable value. For most cars (dutiable value above PHP 750,000), it’s PHP 2,000.9Bureau of Customs. Customs Administrative Order No. 02-2025
- Arrastre and wharfage charges for cargo handling and port use.
- Storage fees if the vehicle sits at the port past the free period.
- Customs broker professional fees.
A Worked Example
Take a passenger car with a CIF value of PHP 1,500,000 and an assumed selling price in the PHP 1,000,001–4,000,000 bracket.
Customs duty: PHP 1,500,000 × 30% = PHP 450,000.
Excise tax: At 20% on a PHP 1,500,000 selling price = PHP 300,000.
VAT: 12% × (1,500,000 + 450,000 + 300,000) = 12% × 2,250,000 = PHP 270,000.
Total taxes: PHP 1,020,000, roughly 68% of the CIF value, before fixed fees and port charges.
Why Your Final Bill May Differ From Your Estimate
Two valuation details reshape the math in practice. The excise base, the net manufacturer’s or importer’s selling price, is not always the same as the CIF value; for a new vehicle brought in by a dealer, it can include the importer’s margin. And for used vehicles, the Bureau of Customs does not simply accept your purchase price. Valuation runs through depreciation schedules and motor vehicle reference publications, which can push the assessed value above or below what you actually paid. The number on your invoice is a starting point, not the final word.