Eyeing a Rolex Daytona? The DOF Has Ruled That Luxury Watches Are Exempt From 20% Excise Tax
Watch collectors looking to build up their Rolex stash, here's some good news for you to start the week: The Department of Finance (DOF) has ruled that Rolex watches are indeed immune from excise tax.
This news reverses a previous ruling subjecting wristwatches made of precious metals to a 20% excise tax under section 150a of the country's Tax Code.
In the latest ruling signed by former secretary of finance Carlos Dominguez last June 29, the agency deemed that wristwatches and clocks are not categorized as "non-essential goods" under section 150a of the Tax Code—thus exempting these products from a 20% excise tax.
"It appears wristwatches and clocks were not at all considered in the Sections for Jewelry, Automobiles, Perfumes, and Others," the ruling reads, adding that these products still were not included when the coverage of non-essential goods was expanded later on.
"Thus, it is clear that when Section 163 (renumbered as Section 150) of EO [Executive Order] No. 273 was carried forward as Section 150 of the 1997 Tax Code for the purposes of imposing excise taxes at 20%, the enumeration therein did not contemplate the inclusion of wristwatches and clocks."
The ruling goes on to say that repealing a product's classification as a semi-essential item does not immediately make it a non-essential one.
"This department believes that it is the function of the object that principally determines whether it is non-essential or semi-essential," the ruling reads, adding that the price or value of something does not dictate if it is semi- or non-essential either.
"In fact, Section 150a specifically subjects to excise tax even imitation jewelry precisely because they are non-essential. The same is true for opera glasses and lorgnettes. A watch is a semi-essential device which allows the wearer to keep track of time. Jewelry, on the other hand, is solely for personal adornment and, thus, is classified as non-essential."
You can check out the DOF ruling in its entirety here. What do you think of this news? Let us know in the comments.
From: Top Gear Philippines