Tax Computation

Fundamentals of Computation of Duties and Taxes for Imported Goods

A. Basic Formula

Total Duties and Taxes =Customs Duty
+ 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 shipmentIPF/entry
Up to P250,000P 250.00
Over P250,000 to P500,000P 500.00
Over P500,000 to P750,000P 750.00
Over P750,000P 1000.00

F. List of Articles subject to Excise Tax

G. Normal Computation for Motor Vehicles

Total Car Value =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