Fundamentals of Computation of Duties and Taxes for Imported Goods

A. Basic Formula Total Duties and Taxes = Customs Duty + VAT + IPF + Excise Tax (if applicable) B. How to Arrive at Customs Duty Customs Duty = Customs Value (Dutiable Value) x Foreign Exchange Rate x Rate of Duty Dutiable Value = Cost of Goods + Freight + Insurance + Other Charges and Costs Exchange Rate = As published weekly through Customs Memorandum Circular Rate of Duty = As per classification of goods under AHTN, Section 104, TCCP C. How to Arrive at Value Added Tax (VAT) VAT = 12% of Total Landed Cost (TLC) TLC = Dutiable Value + Bank Charges + Customs Duty + Brokerage Fee + Arrastre Charge + Wharfage Due + Customs Documentary Stamp (CDS) + Import Processing Fee (IPF) D. CDS = Fixed Amount of P265.00 E. IPF Table per CAO 2-2001 DV of shipment Up to P250,000 IPF/entry P 250.00

DV of shipment Over P250,000 to P500,000 Over P500,000 to P750,000 Over P750,000 F. List of Articles subject to Excise Tax G. Normal Computation for Motor Vehicles Total Car Value =

IPF/entry P 500.00 P 750.00 P 1000.00

Book Value + Accessories (if any) Depreciation Value = Total Car Value - Depreciation (based on year model and cc) Cost = Depreciation Value x 80 (Less: 20% wholesale allowance/fixed) Dutiable Value (in $) = Cost + Insurance + Freight Customs Duty = Dutiable Value (in $) x Rate of Exchange x Rate of Duty Landed Cost / AVT Base = Customs Duty + Dutiable Value in Php + Miscellaneous Expenses Ad Valorem Tax = Landed Cost / AVT Base x Rate of Ad Valorem Tax (under RA 9224) Value Added Tax Base = Ad Valorem Tax + Landed Cost Value Added Tax = Value Added Tax Base x 12% (Rate of VAT) Total Duties of Taxes = Customs Duty + Ad Valorem Tax + VAT + IPF