Question & AnswerQ&A (BOC ADMINISTRATIVE ORDER NO. 04-2004)
The primary objective is to enhance and consolidate regulations concerning the WTO Valuation System to ensure a fair, uniform, and neutral system for the valuation of goods for customs purposes, based primarily on the transaction value of the goods, and to implement record keeping and post-entry audit systems.
Transaction Value is the price actually paid or payable for the goods when sold for export to the Philippines, adjusted as provided by law, subject to conditions such as no restrictions on use/disposal, no conditions affecting value, unrelated buyer and seller, and no part of proceeds accruing to the seller unless adjustments are made.
If the relationship did not influence the price or the transaction value closely approximates test values such as sales to unrelated buyers of identical or similar goods or deductive/computed values, adjustments and considerations apply as per the regulations.
Adjustments include commissions and brokerage fees (except buying commissions), cost of containers and packing, assists, royalties and license fees, proceeds from subsequent resale accruing to the seller, transport to the port of entry, loading/unloading/handling charges, and insurance.
1) Transaction Value; 2) Transaction Value for Identical Goods; 3) Transaction Value for Similar Goods; 4) Deductive Value; 5) Computed Value; 6) Fallback Value.
Identical goods are those that are the same in all respects including physical characteristics, quality, reputation; produced in the same country and by the same producer as the goods being valued, excluding goods with engineering or design work undertaken in the Philippines provided by the buyer free or at reduced cost.
Records include company structure documents, purchase documentation, shipping/importation/exportation records, manufacturing/stock/sales records, financial and accounting documents, and electronic data relevant to verifying transaction value accuracy, kept for three years from import entry filing.
An administrative fine of 20% ad valorem of the goods' value, hold delivery or release of subsequent goods until penalties are paid, and criminal prosecution with fines from Php100,000 to Php200,000 and/or imprisonment of 2 years and 1 day up to 6 years.
The Bureau shall notify the importer, allow them to respond, and if doubts persist, determine dutiable value using alternate methods sequentially, and upon written request, provide explanation in writing for the valuation decision.
If there is gross undervaluation defined as a 200% or higher discrepancy between declared and test values and the importer fails to satisfactorily explain the difference, the Commissioner may acquire goods for declared customs value plus duties paid, subject to appeal.