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General FAQs
To clear goods through Philippine Customs, the following basic steps must be followed:
Registration with Bureau of Customs (BOC): Importers must register with the Bureau of Customs (BOC) and obtain a Taxpayer Identification Number (TIN), which is necessary for the importation process.
Import Declaration Filing: Once the goods arrive in the Philippines, the importer or a customs broker must file an Import Entry (Customs Declaration) with the BOC. This declaration should contain key details like the invoice, Bill of Lading, Packing List, and Import Permit (if applicable).
Payment of Duties and Taxes: Customs will assess the duties and taxes based on the goods' value (including cost, insurance, and freight—CIF value). The importer must pay these fees to the BOC, which can be done through an accredited bank or the BOC’s online payment system.
Customs Inspection and Clearance: The shipment may be subject to inspection by Customs officers. Depending on the risk profile of the goods, the shipment could be subject to document review or physical inspection.
Release of Goods: Once the BOC clears the shipment, and all fees are paid, the goods can be released from the port and delivered to the importer.
Key Tip: It’s highly recommended to work with a licensed customs broker to handle the paperwork, ensure compliance with regulations, and expedite the customs clearance process.
The Philippines applies several types of duties and taxes on imported goods. These include:
Import Duty: The Philippines uses the Customs Tariff Code to classify goods and determine the applicable import duty rate. Duties are generally assessed based on the CIF value (Cost, Insurance, Freight) of the goods. Rates vary from 0% to 30%, depending on the product category.
Value Added Tax (VAT): A 12% VAT is imposed on most goods imported into the Philippines. This is applied to the total value of the goods, including the import duties.
Excise Tax: Certain goods, such as alcohol, tobacco, petroleum, and automobiles, may be subject to excise taxes in addition to import duties and VAT. These taxes are based on the type of product and its value.
Customs Fees: These include handling charges and processing fees related to the customs clearance process. Customs fees are relatively low but may vary depending on the value of the goods being imported.
Key Tip: Knowing the correct tariff classification and understanding which taxes apply to your goods will help in accurately calculating import costs and ensuring compliance.
To import goods into the Philippines, the following documentation is typically required:
Import Declaration (Customs Entry): This is the primary document required to initiate the customs process. It includes information on the goods being imported, their value, origin, and the consignee.
Commercial Invoice: This document provides the transaction details between the seller and buyer, such as the price, quantity, and description of the goods.
Bill of Lading (B/L): This is the shipping document issued by the carrier that shows proof of shipment and ownership of the goods.
Packing List: This document contains detailed information about the contents of each package in the shipment, including weight and dimensions.
Import Permit (if applicable): Certain products, such as food, pharmaceuticals, and hazardous materials, may require specific permits or certifications from regulatory agencies like the Food and Drug Administration (FDA) or Department of Agriculture (DA).
Certificate of Origin: For preferential tariff treatment under trade agreements (e.g., ASEAN Free Trade Area or Generalized System of Preferences), a certificate of origin may be required.
Other Special Documents: Depending on the nature of the goods, additional documents may be needed, such as health and safety certificates, quarantine clearances, or environmental permits.
Key Tip: Ensure that all documentation is accurate and complete, as incomplete or incorrect paperwork is a common cause of delays in customs clearance.
Delays in Philippine Customs clearance are often caused by the following issues:
- Incomplete or Incorrect Documentation: Missing or incorrect documents, such as wrong tariff codes, missing import permits, or mismatched invoices, can cause customs to hold up shipments for clarification.
- Improper Classification of Goods: Misclassifying goods in terms of tariff codes can result in delays, as Customs may need to re-assess the correct duty and tax rate.
- Unpaid Duties and Taxes: If the importer does not pay the required duties or taxes on time, Customs will not release the goods.
- Random Inspections or High-Risk Shipments: Shipments flagged for inspection due to high-risk factors (e.g., high-value items, new suppliers, or restricted goods) can be delayed as Customs conducts physical inspections or reviews.
How to avoid delays:
- Work with a Licensed Customs Broker: Brokers are experts in navigating the customs process, ensuring that all documentation is submitted correctly and on time.
- Ensure Proper Tariff Classification: Properly classify goods using the Harmonized System (HS) code to avoid misclassification and ensure the correct duties are paid.
- Prepay Duties and Taxes: Pay duties and taxes promptly to prevent delays in clearance.
- Prepare for Inspections: Ensure that goods are properly packed and labeled to avoid complications during physical inspection.
Non-compliance with Philippine Customs regulations can lead to various penalties, depending on the nature of the violation. Common penalties include:
Fines: Customs violations, such as incorrect declarations, undervaluation of goods, or failure to pay duties and taxes, can result in fines. The amount varies depending on the severity of the offense but can range from a small fine to a percentage of the value of the goods involved.
Seizure of Goods: Goods that are found to be in violation of import laws (e.g., restricted items, misdeclared goods, or prohibited products) may be seized by Customs.
Delay in Clearance: Non-compliance with documentation requirements or failure to settle dues can cause significant delays in customs clearance. Repeated violations can lead to the suspension or revocation of the importer’s accreditation with the Bureau of Customs.
Criminal Liability: In cases of serious violations, such as smuggling, fraudulent misdeclaration, or trafficking prohibited goods, criminal charges may be filed against the importer, potentially resulting in imprisonment.
How to avoid penalties:
- Ensure Accurate and Complete Documentation: Double-check all forms and supporting documents before submission to prevent errors.
- Stay Informed About Regulations: Regularly update your knowledge of Philippine Customs regulations, including any changes in tariffs or restricted goods.
- Work with Experts: Engage a reputable customs broker or legal advisor to ensure full compliance with all laws and procedures.
