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Philippine Standard Time:
24 July 2024, 01:38 AM

Duty and Tax-Free Privileges

1. WHO ARE ENTITLED TO DUTY AND TAX FREE PRIVILEGES?

Section 800 of the CMTA provides duty and tax free privileges to the following individuals, the extent of which depends on their particular status:
(a) Returning Filipino Residents. They are nationals who have stayed in a foreign country for a period of at least 6 months.
(b) Overseas Filipino Workers. They are holders of valid passports duly issued by the Department of Foreign Affairs (DFA) and certified by the Department of Labor and Employment (DOLE) or the Philippine Overseas Employment Administration (POEA) for overseas employment purposes. They cover all Filipinos, working in a foreign country under employment contracts, regardless of their professions, skills or employment status in a foreign country.
(c) Overseas Filipinos. They are Filipinos or their families and descendants who are now residents or citizens of other countries (and are coming to resettle in the Philippines).

2. ARE BALIKBAYANS ALSO ENTITLED TO DUTY AND TAX FREE PRIVILEGES?

Yes, Balikbayans are also entitled to conditionally duty and tax free privileges. The term “Balikbayans” means Filipino citizens who have been continuously out of the Philippines for a period of at least 1 year, Filipino overseas workers, or former Filipino citizens, and their family, who had been naturalized in a foreign country, coming or returning to the Philippines.

3. WHAT IS THE EXTENT OF THE DUTY AND TAX FREE PRIVILEGE FOR RETURNING RESIDENTS?

The privilege covers previously exported personal and household effects including household appliances and goods of luxury which were formally declared before departure from the Philippines and identified under oath before the District Collector; and personal and household effects including wearing apparel, goods of personal adornment, toilet goods, instruments related to one’s profession and analogous personal or household effects purchased in foreign countries, but excluding luxury items, vehicles, watercrafts, aircrafts and animals.
These shall be exempted provided that:
(1) These are not in commercial quantities;
(2) These are not intended for barter, sale or hire;
(3) These are accompanying them on their return, or arriving within 60 days after the owner’s return; and
(4) Limited to the FCA or FOB value of:
(i) PHP 350,000 for those who have stayed abroad for at least 10 years and have not availed of this privilege within 10 years prior to their arrival;
(ii) PHP 250,000 for those who have stayed in abroad for at least 5 years but not more than 10 years and have not availed of this privilege within 5 years prior to their arrival; or
(iii) PHP 150,000 for those who have stayed in abroad for less than 5 years and have not availed of this privilege within 6 months prior to their arrival.

Any amount in excess of the above-stated threshold shall be subject to the corresponding duties and taxes under the CMTA and the NIRC, as amended.

4. HOW ABOUT THE DUTY AND TAX FREE PRIVILEGE FOR RETURNING OFWs?

In addition to the privileges granted to Returning Residents, Returning OFWs shall have the additional privilege to bring in, tax and duty-free, home appliances and other durables, limited to 1 of every kind once in a given calendar year, accompanying them on their return, or arriving within 60 days after their return, upon presentation of their original passport at the port of entry.

Any amount in excess of FCA value of PHP 150,000 or of the number of tax and duty-free appliances shall be subject to the corresponding taxes and duties.

5. WHAT IS THE EXTENT OF THE DUTY AND TAX FREE PRIVILEGE FOR OVERSEAS FILIPINOS?

The privilege covers professional instruments and implements, tools of trade/occupation/employment, wearing apparel, domestic animals, and personal and household effects. These shall be exempt from duties and taxes, provided that:
(1) These are for their own use and not for barter or sale;
(2) These are accompanying such persons, or arriving within a reasonable time;
(3) Such persons are actually coming to settle in the Philippines;
(4) The goods are brought from their former place of abode; and
(5) Vehicles, vessels, aircrafts, machineries and other similar goods for use in manufacture are excluded from the privilege.

6. IS THERE ANY OTHER PRIVILEGE ASIDE FROM THOSE PREVIOUSLY MENTIONED?

Yes. Filipino residents, OFWs or other Filipinos while residing abroad or upon their return to the Philippines shall be allowed to bring in or send to their families/relatives in the Philippines balikbayan boxes which shall be exempt from applicable duties and taxes imposed under the CMTA and the NIRC, as amended, provided that:
(a) Balikbayan boxes shall contain personal and household effects only and shall neither be in commercial quantities nor intended for barter, sale or for hire;
(b) The FCA value of which shall not exceed PHP 150,000;
(c) This privilege can only be availed up to 3 times in a calendar year; and
(d) Any amount in excess of the allowable non-dutiable and/or non-taxable value shall be subject to the applicable duties and taxes.

7. ARE FAMILY MEMBERS OF RETURNING RESIDENTS, OFWs AND OVERSEAS FILIPINOS ALSO ENTITLED TO CERTAIN PRIVILEGES?

Yes, provided that the prescribed conditions are satisfied.

8. WHAT ARE THE CONDITIONS AND/OR LIMITATIONS ATTACHED TO THE DUTY AND TAX FREE PRIVILEGE?

The following are the conditions for availment of duty and tax free privilege/s:
(a) Presentation of a favorable written indorsement from the Department of Finance;
(b) The goods granted duty and tax free privilege shall not be sold, bartered or traded;
(c) The quantity is not commercial;
(d) The goods are not prohibited importations; and
(e) If the goods are regulated importations, endorsement from the proper regulatory agency.

(Source: CMTA)

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