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 | IPF/entry |
|---|---|
| Up to P250,000 | P 250.00 |
| Over P250,000 to P500,000 | P 500.00 |
| Over P500,000 to P750,000 | P 750.00 |
| Over P750,000 | P 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 | |
| + VAT | |
| + IPF |
