CUSTOMS VALUATION (MIDTERM)

COMPUTATION OF TOTAL LANDED COST

Brokerage Fees- Pursuant to CAO 1 – 2001, the rates of customs brokers and brokerage firms in
all ports of the Philippines are as follows:

For services rendered to clear shipments covered by

Informal Entries – PHP 700.00

Export Declaration
For services rendered to clear shipments covered by export declarations, one-half of import rates

Bank Charges-
Applicable only when goods are
covered by a Letter of Credit.
Import Processing Fee (IPF)
Pursuant to CAO 2 – 2001, the rates of
customs fees and charges shall include
Import Processing Fees with schedule as
follows:

Customs Documentary Stamps- Pursuant to CMO 30 – 2019, the Bureau of Customs Fees and
Charges shall include Customs Documentary Stamp Tax amounting to PHP 280.00 (for BOC and
BIR).
Arrastre Charges
Arrastre Charges Defined: It is the amount which the owner, consignee, or agent of either, of the
merchandise has to pay for the receiving, handling and custody of the merchandise imported or
for export.
To account for increase in port charges, the arrastre charges to be observed in the Automated
Customs Operations System (ACOS) for customs assessment purposes at outports (CMO 26-
1995C):
a. PHP 8.00 per metric ton - for shipside cargo
b. PHP 110.00 per metric ton - for pier side cargo
c. As Declared if HIGHER
Pursuant to CMP 7-2014, the schedule of cargo handling tariff arrastre charges for assessment
purposes shall be as follows:
CONTAINER CARGO Cargo charges (Arrastre)
Basis Rate (php) Exclusive of
12% VAT
FCL-Import
• 20 footer /box 3,727.00
• 40 footer /box 8,551.00
• 45 footer /box 8,551.00
FCL-Export
• 20 footer /box 3,043.00
• 40 footer /box 6,989.00
• 45 footer /box 6,989.00
Shut-out Export- an
added charge on top
of the arrastre
(export) charge of /box 3,039.00
• Full/loaded /box 1,519.00
• Empty
Charges on Containerized Dangerous Cargo (Exclusive of 12% VAT) IMPORT
CLASS: CLASS ARRASTRE

1. Explosives 1x20 1,6,8 5,590.50

2. Gases
3. Flammable Liquod 2,3,4,7 4,658.75
4. Flammable Solid
5. Oxidizing Agent 5,9 4,099.70
6. Poisonous
7. Radioactive (Radiation) 1x40 & 1,6,8 12,826.00
8. Corrosive (Acid) 1x45
2,3,4,7 10,688.75
9. Irritants
5,9 9,406.10

Arrastre on LCL/Break Bulk Cargo (Exclusive of 12% VAT) IMPORT

IMPORT BASIS IMPORT EXPORT

General cargo /RT 149.00 122.00
Bagged Cargoes (Cargoes /RT 264.00 216.00
in bags)
Palletized /RT 117.00 96.00
Unpacked Fish /MT 994.00 812.00
Fish in Cartons /RT 664.00 542.00
Steel Products MT/RT 75.00 143.00
Logs 1000 Bd. Ft. 228.00 186.00
Lumber 1000 Bd. Ft. 228.00 186.00
Heavy Lift
• 5-15 /MT 359.00 293.00
• Over 15 to 20 tons /MT 593.00 484.00
• Over 20 tons /MT 835.00 682.00
Checking Charge MT/RT 17.00 17.00
(Shipside Delivery)

Wharfage Dues
The amount assessed against the cargo of a vessel engaged in foreign trade or coastwise trade,
based on the quantity, weight or measurement received and/or discharged by such vessel. Either
the owner, consignee or agent of the merchandise is liable for charge.
The following schedule of wharfage dues shall be utilized in the computation of the landed cost
for customs assessment purposes at outports (CMO 26-1995):
a. PHP 17.00 per metric ton - for cargo declared as shipside cargo
b. PHP 34.00 per metric ton - for cargo declared as pier side cargo
c. As Declared, if HIGHER
For purposes of computation of Total Landed Cost or VAT Base, all bulk imports discharged
shipside at Privately Owned Piers/Ports allowed by the PPA shall have a uniform wharfage
charges equivalent to the PHP 18.35 per metric ton, as provided in number 7 of PPA-PMO-NH
Memorandum Circular No.05 Series of 1994 (CMO 04-2006).
Pursuant to CMO 07-2014, the schedule of IMPORTED CARGO
wharfage dues for assessment purposes shall be • 20 footer Php 519.35
as follows: WHARFAGE ON CONTAINARIZED • 40 footer 779.05
CARGO • 45 footer 916.50

Wharfage Charges
Revenue ton (Volume) Php 30.55 15.25 CARGO FOR
Metric ton (Weight) 36.65 18.35 EXPORT Php 259.70
• 20 footer 391.05
• 40 footer 458.25
• 45 footer

TOTAL LANDED COST

Landed cost is the total charge associated with getting a shipment to its destination. It’s most
commonly associated with international shipping, and usually refers to the cost of shipping, plus
applicable duties, taxes and fees.
The Total Landed Cost of an importation
(plus excise tax if any) is the basis of
Value Added Tax (NIRC).
T. Landed Cost = DV PHP + CUD +
Misc. Expenses
Misc. Expenses = BF + BC (If covered
by L/C) + IPF + CDS + AC + WD

VALUE ADDED TAX ON IMPORTATION

Importation of goods is subject to a 12% VAT based on the total value used by the Bureau of
Customs in determining tariff and customs duties, plus excise taxes, if any, and other charges
which shall be paid prior to the release of the goods from customs custody: Provided, That where
the customs duties are determined on the basis of the quantity or volume of the goods, the VAT
shall be based on the landed cost plus excise tax, if any.

In case tax-free imports are subsequently sold to non-exempt persons, the purchasers or
possessors thereof shall be considered the importers thereof who shall be liable for any internal
revenue tax on such importation.
Exempt Transactions (Importations), Sec. 109:

A. Sale or importation of agricultural, livestock, and exclusively in the production and/or

poultry, and marine food products in their
“original state”, Provided, that the food is
generally used for human consumption.
Livestock or poultry does not include fighting
cocks, racehorses, zoo animals and other animals
generally considered as pets.
Polished and/or husked rice, corn grits, raw cane
sugar and molasses, ordinary salt and copra shall
be considered as agricultural products in their
original state.
Bagasse is not included in the exemption
provided for under this section.
B. Sale or importation of fertilizers, seeds,
seedlings and fingerlings, fish, prawn, livestock
and poultry feeds, including ingredients, used in
the manufacture of finished feeds except specialty
feeds.
processing of their produce.
R. Sale, importation, printing or publication of
books and any newspaper, magazine, review or
bulletin which appears at regular intervals with
fixed prices or subscription and sale and which is
not devoted principally to the publication of paid
advertisements.
S. Transport of passengers by international
carriers
T. Sale, importation or lease of passenger or
cargo vessels and aircraft, including engine,
equipment and spare parts thereof for domestic
or international carriers.
U. Importation of fuel, goods and supplies by
persons engaged in international shipping or air
transport operations.

Specialty feeds refers to food for race horses,

fighting cocks, aquarium fish, zoo animals and
other animals generally considered as pets.

C. Importation of personal and household effects

belonging to residents of the Philippines returning
from abroad and non-resident citizens coming to
resettle in the Philippines.

D. Importation of professional instruments and

implements, wearing apparel, domestic animals,
and personal household effects except machinery
and other goods use in the manufacture and
merchandise of any kind in commercial quantity VAT for Goods Subject to Excise Tax or Ad
belonging to persons coming to settle in the Valorem Tax: VAT = T.LC x 12% (Fixed)
Philippines.
VAT Base = T.LC + AVT
K. Transactions which exempt under
international agreements to which the Philippines
VAT = VB x 12%
is a signatory under special laws,

Except those under Presidential Decree No. 529

that grant Petroleum Exploration Concessionaires
exemption from Custom Duty and Tax of
Importation Machinery required for their
Exploration Operation.

L. Importation by agricultural cooperatives of

direct farm inputs, machineries and equipment,
including spare parts thereof, to be used directly
FORMAL ENTRY
Total Amount Due to the Government

1. Total Item Taxes (Duties and Taxes)

Shall comprise of Customs Duties and Taxes mainly VAT

(Special Duties and Excise Tax)

Note: In the summary of Duties and Taxes, values should be

rounded off to the nearest Peso.

T.I.T. = CUD + VAT

T.I.T. for Goods Subject to Excise Tax or Ad Valorem Tax:

T.I.T. = CUD + VAT + (ET or AVT or SD)

2. Total Global Taxes

Shall comprise of Import Processing Fee, Customs Documentary Stamp Tax and Container
Security Fee (only if shipment is containerized)

Note: In the summary of Duties and Taxes, values should be rounded off to the nearest Peso.

CSF = Container Security Fee

applicable for FCL , 1x20’ = USD 5.00 x E/R;and

1X40’ = USD10.00 x E/R

T.G.T. = IPF + CDS + CSF (if Containerized only)

Total Amount Due to the Gov’t = T.I.T. (CUD+VAT) + T.G.T. (IPF+CDS+CSF)

INFORMAL ENTRY
PRO-RATION COMPUTATION
is an approach to determine the individual customs value, freight, insurance premium, etc.
whenever an import entry consist of several items under different tariff headings and rates of duty
(LCL Cargo).
Understanding Pro-ration

Pro rata is a Latin term used to describe a proportionate allocation. It essentially translates to "in
proportion," which means a process where whatever is being allocated will be distributed in equal
portions.

If something is given out to people on a pro rata basis, it means assigning an amount to one
person according to their share of the whole. While a pro rata calculation can be used to
determine the appropriate portions of any given whole, it is often used in business finance.

Important consideration: When pro-rating, the item to be pro-rated is always assumed the
numerator and total term of shipment becomes the denominator. Whatever is the factor will be
multiplied by the individual term of shipment or customs value whenever applicable.

To derive individual CV/FOB

Formula (Long Method)

Total CV/FOB = Factor x Ind. T/S = Ind. FOB

Total T/S

Short-cut Method

Ind. T/S = Factor x Total FOB = Individual FOB

Total T/S