BIR Issues New Tax Rules Under CMEPA: Key Adjustments to Auto, Stock, and Stamp Taxes

The Bureau of Internal Revenue (BIR) has issued several new Revenue Regulations (RRs) to implement the recent amendments brought about by the “Capital Markets Efficiency Promotion Act” (CMEPA). These regulations introduce significant changes to the taxation of automobiles, Documentary Stamp Tax (DST), and Stock Transaction Tax (STT), generally taking effect on July 1, 2025. Businesses and consumers should be aware of these immediate shifts in tax rates and exemptions.

Revenue Regulations (RR) No. 018-2025, which amends the imposition of excise tax on automobiles, notably removes pick-up trucks from the list of tax-exempt vehicles, beginning July 1, 2025. A pick-up truck is defined as a motor vehicle having an enclosed cab and an open body with low sides and a tailgate. The regulation also reiterates the tiered ad valorem tax schedule based on the Net Manufacturer’s or Importer’s Selling Price, ranging from 4% for vehicles priced up to P600,000.00, up to 50% for vehicles over P4,000,000.00. In line with environmental policy, purely electric vehicles remain exempt from excise tax, while hybrid vehicles are subject to fifty percent (50%) of the applicable excise tax rates.

Separately, RR No. 019-2025 implements rate adjustments for the Documentary Stamp Tax (DST). The DST rate for the original issue of shares of stock has been set at Seventy-Five Percent (75%) of One Percent (1%) of the par value or the actual value represented by each share. A similar rate—Seventy-Five Percent (75%) of One Percent (1%)—is now applied to the face value of debt instruments. Crucially, the regulations also clarify tax exemptions for capital market instruments, exempting from DST the original issuance, redemption, or disposition of shares in a mutual fund company, as well as the issuance of certificates or evidence of participation in a mutual fund or unit investment trust fund.

Furthermore, RR No. 020-2025 adjusts the Stock Transaction Tax (STT) rate. Effective July 1, 2025, the sale, exchange, or disposition of shares of stock or other securities listed and traded through a Local Stock Exchange is subject to a tax rate of 1/10 of 1% (0.1%) of the gross selling price or gross value in money. This same rate of 1/10 of 1% (0.1%) is also imposed on the sale, exchange, or disposition of shares of stock of a domestic corporation listed and traded through a Foreign Stock Exchange. However, sales or exchanges of such listed stocks by a dealer in securities through a local or foreign exchange will be subject to ordinary income tax rates instead of capital gains tax.

Given the effective date of July 1, 2025, manufacturers, assemblers, importers, and other responsible parties must ensure compliance with the transitional provisions, which require updated statements and inventory submissions regarding pick-up models and units in transit or subject to import entries made before June 30, 2025, to the BIR.