DUTIES AND TAXES OVERVIEW
Customs Duty
Import duties and taxes apply to goods brought into the Philippines, whether imported by an individual or a business entity.
De Minimis Value
De minimis is the value of goods on which no duties or taxes are levied, the de minimis threshold is PHP 10,000. Shipments of de minimis value (PHP 10,000 or less) are considered negligible imports and qualify for “Shipments covered by a Master Bill of Lading (MBL) or Master Airway Bill of Lading (MAWB) but with multiple House Bill of Ladings (HBL) or House Airway Bill of Ladings (HAWB) with one or more invoices with the same consignee and sender is considered a single item and is subject to duties and taxes if the total value exceeds the de minimis value.
How can you qualify with the DDU (Delivered Duty Unpaid) option for less than PHP 10,000 excluding duties and taxes?
For the rule under PHP 10,000 excluding duties and taxes, it is the value of the combined shipment on the same day it clears Philippine Customs. Even if you have created separate shipping orders, customs will aggregate the value of all orders shipped on the same day to the same recipient or address to determine the de minimis value. To be eligible for the Duty and Tax Exemption Rule, please ensure that the total value of your shipments does not exceed PHP 10,000 to reach Philippine Customs in one day. Even if has created separate shipping orders, Philippine Customs will aggregate the value of all orders shipped on the same day to the same recipient to determine de minimis value.
To be eligible for the duty and tax exemption rule, please ensure that the total value of your shipments does not exceed PHP 10,000. It is highly recommended to track your shipments and wait for the shipments to clear Philippine Customs and then send the next shipment batch(es). That is also given if your declaration is correct and approved by the Philippine Customs Evaluation. Philippine Customs has the final decision on taxes and Ex-works is not responsible for tax issues or changes in government policies.
How can you be eligible to pay no taxes or duties up to PHP 95,000 per consolidated order with the DDP (Delivered Duty Paid) option?
DDP only applies to shipments with a declared value of PHP 95,000 or less. If it’s more than PHP 95,000, you can’t choose DDP at checkout and can just choose DDU instead. Please note that currency may vary abroad, which may affect the availability of the DDP option.
Reminder
Remember to correctly declare your shipments using your invoice and receipt. Make sure you include the currency of the warehouse you shipped to and that the unit price per item matches that shown on your invoice and receipt. See How to Declare Your Philippines Factory Delivery for more information.
Please note that when using DDP, you don’t need to wait for the goods to clear PH customs before shipping the other. If you have two orders, one DDP and one DDU, DDP does not affect the total value of DDU at the time of PH customs clearance.
What do import taxes and customs duties mean?
Customers must pay shipping charges (if applicable) and also Value Added Tax (Value Added Tax) on the full value of the shipments. This is represented by the calculation of Tariff Tax + VAT.
Percentage of Duty Tax & VAT
Philippines customs will charge duty fees for all personal shipments. The average duty fee has a range of 3-30% (normally at around 15%), wherein the shipments will be cleared after clients have settled the duty.
VAT stands for Value Added Tax. VAT is a type of sales tax which is levied on consumption on the sale of goods, services or properties, as well as importation in the Philippines. The tax rate is 12%.
Calculation of Duties and Taxes
DUTIES & TAXES
Customers must pay shipping costs (if applicable) and also Value Added Tax (VAT) on the total value of the shipments. This is represented by the calculation of Customs Tax + VAT.
- CIF = Product price + Cost of Shipping (Freight) + Cost of Insurance
- Duty Tax = Duty % x CIF
- VAT = 12% x (CIF + Duty + excise taxes if any)
- Import Tax & Custom Fees = Duty Tax + VAT
* A local courier company handling fee and a Philippine Customs storage fee may apply. Ex-Works is not responsible for these applicable fees.
EXAMPLE
An individual bought a bag for PHP 15,000; weight is 5 pounds. The pricing plan is DDU.
- Tax Threshold: PHP 10,000
- Product price = PHP 15,000
- Cost of Shipping = PHP 620 + PHP 380 x 4lb = PHP 2,140
- Cost of Insurance = 0
- CIF = 15,000 + 2,140 + 0 = PHP 17,140
CALCULATION
If the total CIF value is PHP 17,140 and the baggage duty rate is 15%.
- Duty Tax = 15% x 17,140 = PHP 2,571
- VAT = 12% x (17,140 + 2,571) = PHP 2,365.3
- Import Tax & Custom Fees = 2,571 + 2,365.3 = PHP 4,936.3
MOST POPULAR DUTY PRODUCT CATEGORY
The following rate of duty rates are subject to change at any time.
- Accessories(W/WO Battery) 15%
- Health & Beauty 3%
- Fashion 15%
- Supplements 15 %
- Toys 3%
- Sports 5%
- Luggage 15%
- Gaming 0%
- Books & Collectibles 0%
Unleash the potential of your business with Ex-works
Ex-works has assisted companies globally in imports and exports. Allow us to handle all your shipments, so you do not have to face any challenges throughout the customs clearance procedure in the Philippines. We also offer customs clearance services at a small cost if you need to deliver urgently and save time. Open an account today with Ex-works, and let us assist your business in overcoming the obstacles of international customs.