QuestionsQuestions (Republic Act No. 9135)
It is the “price actually paid or payable” for the goods when sold for export to the Philippines, adjusted by specific additions only to the extent they are incurred by the buyer but not included in that price, and only on the basis of objective and quantifiable data.
Examples include commissions/brokerage fees (except buying commissions), cost of containers, packing costs, value of assists/materials/components/parts/tools/dies/moulds and certain design/plans/engineering work supplied free or at reduced cost, royalties and license fees as a condition of sale, proceeds accruing to the seller from resale/disposal/use, transport from port of export to port of entry, loading/unloading/handling in that transport, and insurance.
When there are restrictions on disposition or use other than those imposed by law/Philippine authorities, restrictions limiting geographical resale area, or restrictions that do not substantially affect value; when sale/price is subject to conditions for which value cannot be determined; when part of proceeds from resale/disposal/use accrues to the seller unless an appropriate adjustment can be made; or when buyer and seller are related and the relationship influenced the price.
They include officers/directors of each other’s businesses; legally recognized partners; employer-employee; ownership/control of 5%+ voting stock/shares of both seller and buyer; one controlling the other; both controlled by a third person or jointly controlling a third person; and members of the same family up to the fourth civil degree (including affinity/consanguinity). Sole agent/distributor/concessionaire relationships may also trigger being deemed related if they fall within the listed cases.
Method Two. “Identical goods” are goods the same in all respects, including physical characteristics, quality, and reputation. Minor differences in appearance do not prevent classification as identical if they otherwise conform.
“Similar goods” have like characteristics and like component materials enabling the same functions and commercial interchangeability. Quality, reputation, and existence of a trademark are among factors for deciding similarity.
Deductive value is based on unit price in the Philippines of imported goods (or identical/similar goods) sold in the same condition as when imported, in the greatest aggregate quantity, at/around the time of importation, to persons not related to sellers, with deductions for commissions/profit & general expenses; transport/insurance/associated costs within the Philippines; appropriate costs/charges referred to in the Code; and customs duties and other national taxes payable in the Philippines due to importation or sale.
If the imported goods (or identical/similar goods) are not sold in the Philippines at/around the time of importation in the condition as imported, the customs value may be based on unit price at the earliest date after importation but before expiration of ninety (90) days.
It is the sum of: cost/value of materials and fabrication/processing; profit & general expenses usually reflected in sales of goods of the same class/kind produced in the country of export for export to the Philippines; freight, insurance fees and other transportation expenses; any assist if not included under the materials/processing paragraph; and the cost of containers and packing if not included there.
Customs value may not be based on: selling price in the Philippines of domestically produced goods; a system accepting the higher of two alternative values; domestic market price in the country of exportation; production costs other than computed values determined under Method Five for identical/similar goods; price of goods for export to other countries; minimum customs values; or arbitrary/fictitious values.
The Commissioner may acquire for price equal to declared customs value plus duties already paid, paid within ten (10) working days from issuance of the acquisition warrant. If dissatisfied, the importer may appeal within twenty (20) working days to the Secretary of Finance, and thereafter to the Court of Tax Appeals under Sec. 2402.
In absence of fraud or protest or compliance audit, after expiration of three (3) years from the date of final payment of duties, the entry/passages/free settlements become final and conclusive upon all parties, unless liquidation was merely tentative.
Articles of a commercial nature intended for sale, barter or hire with dutiable value of P2,000 or less; and personal and household effects or non-commercial personal-use articles imported in passenger’s baggage, mail, or otherwise, may be cleared on an informal entry whenever duty/tax/other charges are collectible.
Within one year after payment upon statement of error approved by the Collector (conformity with Sec. 1707); and within fifteen (15) days after payment upon request for reappraisal and/or reclassification addressed to the Commissioner by the Collector if appraisal/classification is deemed low.
It creates a presumption of inaccuracy in the transaction value declared and constitutes grounds for the Bureau of Customs to conduct a re-assessment of the goods.
Importers must keep records and relevant customs commercial data for three (3) years from date of importation; brokers must keep copies covering transactions they handle for the same period. Failure to keep records or deny full and free access is punishable under Sec. 3610 with a fine of not less than P100,000 but not more than P200,000 and/or imprisonment of not less than two (2) years and one day but not more than six (6) years.