Question & AnswerQ&A (Republic Act No. 9135)
Under Method One, the dutiable value is the transaction value, which is the price actually paid or payable for the goods when sold for export to the Philippines, adjusted by adding commissions, brokerage fees, cost of containers and packing, royalties, transport costs, insurance, and other specified costs incurred by the buyer but not included in the price.
Method One shall not be used if there are restrictions on the disposition or use of goods that affect value, if the sale price is conditional or indeterminable, if part of the proceeds from resale will accrue to the seller without adjustment, or if the buyer and seller are related and such relationship influences the price.
They include officers or directors of each other's businesses, legal partners, employer-employee relationships, those owning or controlling at least 5% of outstanding voting stock in both companies, entities controlling or controlled by one another, or members of the same family up to the fourth civil degree including by affinity or consanguinity.
Method Two (Transaction Value of Identical Goods), Method Three (Transaction Value of Similar Goods), Method Four (Deductive Value), Method Five (Computed Value), and Method Six (Fallback Value) are used successively if Method One fails.
Adjustments can be made within one year after payment upon approved error statement, within 15 days after payment on request for reappraisal if appraisal is low, upon timely protest from the interested party, or upon demand by the Commissioner after compliance audit.
It allows the Commissioner of Customs to acquire imported goods in question to protect government revenue from undervaluation for a price equal to their declared customs value plus duties paid. Importers may appeal decisions within prescribed timeframes.
Importers must keep records of their importations, books of accounts, business and computer systems, and all customs commercial data including payment records for three years for verification of transaction values declared.
Authorized customs officers may enter premises during office hours to audit, inspect, verify, or investigate records relevant to customs duties, make copies or extracts, and require reasonable facilities to carry out duties. Denial of access presumes inaccuracy in declared values.
Penalties include fines ranging from One hundred thousand to Two hundred thousand pesos, imprisonment between two years and one day to six years, and possible administrative sanctions including withholding delivery of imported articles.
Penalties vary by degrees of culpability: negligence with fines at 1/2 to 2 times revenue loss; gross negligence with fines 2.5 to 4 times revenue loss; fraud with fines 5 to 8 times revenue loss plus imprisonment of 2 to 8 years.