Tax Rate and Timing
- The compensating tax rate is equivalent to the percentage tax imposed under the same Title on original merchant, importer, or manufacturer transactions.
- Payment is required upon withdrawal or removal of goods from the customhouse or post office.
Exemptions for Certain Taxpayers
- Merchants, importers, and manufacturers already subject to taxes under Sections 184, 185, 186, or 189 of the Title are exempt from this compensating tax if:
- The goods are to be sold, resold, bartered, or exchanged, or
- The goods are used in manufacturing or preparing articles for sale, barter, or exchange and form part thereof.
- Goods used by the importer in the manufacture of articles subject to specific tax or consigned abroad and forming part thereof are also exempt.
Post-Withdrawal Use and Compliance
- If goods are withdrawn without paying the compensating tax and later used for other purposes:
- Corresponding book entries or written notice to the Collector of Internal Revenue must be made.
- Compensating tax payment is due within 30 days from such entry or notice.
- Failure to pay within 30 days results in a 25% increment penalty added to the tax.
Thresholds and Exemptions
- No assessment or collection of the tax on single shipments valued at 100 pesos or less.
- Goods brought in by returning residents valued at 500 pesos or less are exempt.
Definitions and Exclusions
- The term "commodities, goods, wares, or merchandise" does not include vessels, their equipment, or appurtenances purchased or received from outside the Philippines, regardless of the timing of purchase relative to the Act's effectivity.
Effectivity
- The Act takes effect immediately upon approval.