Tax Computation :: Department of Finance

Tax Computation

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   =        500.00
   Over P500,000 to P750,000   =        750.00
   Over P750,000            =        1,000.00

F. List of Articles subject to Excise Tax

G. Normal Computation for Motor Vehicles

          Book Value
   +   Accessories (if any)
          Total Car Value

          Less: Depreciation (based on year model and cc)
          Depreciation Value

    x    80 (Less: 20% wholesale allowance/fixed)
          Cost

   +   Insurance
   +   Freight
          Dutiable Value (in $)

    x    Rate of Exchange
   x    Rate of Duty
          Customs Duty

   +   Dutiable Value in Php
   +   Miscellaneous Expenses
           Landed Cost / AVT Base

   x    Rate of Ad Valorem Tax (under RA 9224)
           Ad Valorem Tax

   +    Landed Cost
           Value Added Tax Base

   x    12% (Rate of VAT)
           Value Added Tax

Total Duties of Taxes = Customs Duty
                                    + Ad Valorem Tax
              + VAT
                                    + IPF