700-708

• SEC. 700. Sequential Application of Valuation Methods. – Imported goods shall be valued in accordance with the provisions of Section 701 of this Act whenever the conditions prescribed therein are fulfilled.
• Where the customs value cannot be determined under the provisions of Section 701 of this Act, it is to be determined by proceeding sequentially through the succeeding sections hereof to the first such section under which the customs value can be determined.  Except as provided in Section 704 of this Act, it is only when the customs value cannot be determined under the provisions of a particular section that the provisions of the next section in the sequence can be used.
• If the importer does not request that the order of Sections 704 and 705 of this Act be reversed, the normal order of the sequence is to be followed. If the importer so requests but it is impossible to determine the customs value under Section 705 of this Act, the customs value shall be determined under Section 704.When the customs value cannot be determined under Sections 701 through 705, it may be determined under Section 706 of this Act.
• SEC. 701, Transaction Value System – Method One. – The transaction value shall be the price actually paid or payable for the goods when sold for export to the Philippines adjusted in accordance with the provisions of tins section: Provided, That:(a) There are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which:(i) Are imposed or required by law or by Philippine authorities;(ii) Limit the geographical area in which the goods may be resold; or(iii) Do not substantially affect the value of the goods;
• SEC. 701, Transaction Value System – Method One. – The transaction value shall be the price actually paid or payable for the goods when sold for export to the Philippines adjusted in accordance with the provisions of tins section: Provided, That:

  (b) The sale or price is not subject to some condition or consideration for which a value cannot be determined with respect to the goods being valued; and
• SEC. 701, Transaction Value System – Method One. – The transaction value shall be the price actually paid or payable for the goods when sold for export to the Philippines adjusted in accordance with the provisions of tins section: Provided, That:

  (c) The buyer and the seller are not related, or where the buyer and the seller are related, that the transaction value is acceptable for customs purposes under the provisions hereof.
• They are officers or directors of one another's business
• They are legally recognized partners in business
• There exists an employer-employee relationship between them
• Any person directly or indirectly owns, controls or holds five percent (5%) or more of the outstanding voting stocks or shares of both seller and buyer
• One of them directly or indirectly controls the other
• Both of them are directly or indirectly controlled by a third person
• Together they directly or indirectly control a third person
• They are members of the same family, including those related by affinity or consanguinity up to the fourth civil degree
• Persons who are associated in business with one another in that one is the sole agent, sole distributor or sole concessionaire, however described, of the other shall be deemed to be related for the purposes of this Act if they fall within, any of the eight (8) cases cited in the preceding paragraph.
• In a sale between related persons, the transaction value shall be accepted as basis for customs valuation whenever the importer demonstrates that such value closely approximates one of the following occurring at or about the same time:(a) The transaction value in sales to unrelated buyers of identical or similar goods for export to the same country of importation;(b) The customs value of identical or similar goods as determined under the provisions of Section 704 of this Act; or(c) The customs value of identical or similar goods are determined under the provisions of Section 705 of this Act.
• In determining the transaction value for imported goods, the following shall be added to the price actually paid or payable:
• Expenses incurred by the buyer but not included in the price paid for the goods:

  • Commissions and brokerage fees (excluding buying commissions)
  • Cost of containers
  • Cost of packing (for labor or materials)
• Value of goods and services incorporated in the imported goods, including:

  • Materials, components, parts, and similar items
  • Tools, dies, moulds, and similar items used in production
  • Materials consumed in production
  • Engineering, development, artwork, design work, plans, and sketches necessary for production, supplied by the buyer free of charge or at a reduced cost
• Amount of royalties and license fees related to the goods being valued that the buyer must pay either directly or indirectly as a condition of sale
• (2) Value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues directly or indirectly to the seller;(3) Cost of transport of the imported goods from the port of exportation to the port of entry in the Philippines;(4) Loading, unloading and handling charges associated with the transport of the imported goods from, the country of exportation to the port of entry in the Philippines; and(5) Cost of insurance.All additions to the price actually paid or payable shall be made only on the basis of objective and quantifiable data.
• Method Two for determining the dutiable value of goods when it cannot be determined under method one
• The dutiable value is the transaction value of identical goods sold for export to the Philippines and exported at or about the same time as the goods being valued
• "Identical goods" are goods that are the same in all respects, including physical characteristics, quality, and reputation
• Minor differences in appearances do not prevent goods from being considered identical
• If multiple transaction values of identical goods are found, the lowest value should be used to determine the customs value
• Transaction Value of Similar Goods - Method Three:
• "Similar goods" are those with like characteristics and similar component materials enabling them to perform the same functions and be commercially interchangeable, even if not alike in all respects
• If the dutiable value cannot be determined using previous methods, it shall be the transaction value of similar goods sold for export to the Philippines at or around the same time
• Factors to consider for similarity include the quality of the goods, reputation, and the existence of a trademark
• If multiple transaction values of identical goods are found, the lowest value should be used to determine the customs value
• Deductive Value – Method Four
• If dutiable value cannot be determined under preceding methods, deductive value is used unless importer requests otherwise
• Deductive value is based on unit price of imported goods or identical/similar goods sold in the Philippines, in the same condition as imported, in greatest aggregate quantity, to unrelated persons at or about the time of importation
• Deductions for deductive value include:

  • Commissions usually paid or agreed to be paid
  • Additions usually made for profit and general expenses
  • Usual costs of transport, insurance, and associated costs incurred within the Philippines
  • Costs of transport from port of exportation to port of entry in the Philippines, loading/unloading/handling charges, insurance
  • Customs duties and other national taxes payable in the Philippines by reason of importation or sale of goods
• If imported goods or identical/similar goods are not sold at or about the time of importation in the Philippines in the same condition, customs value is based on unit price at which they are sold in the same condition at the earliest date after importation but before 90 days after importation
• If imported goods or identical/similar goods are not sold in the Philippines in the same condition as imported, dutiable value can be based on unit price at which goods, after further processing, are sold in greatest aggregate quantity to unrelated persons in the Philippines, with allowance for value added by processing and deductions provided under subsections (1), (2), (3), and (4)
• Computed Value – Method Five is used when the dutiable value cannot be determined by previous methods
• The dutiable value under Method Five is the sum of:

  • The cost or value of materials and fabrication or other processing used in producing the imported goods
  • The amount for profit and general expenses similar to goods of the same class made by producers in the country of exportation for export to the Philippines
  • The freight, insurance fees, and other transportation expenses for importing the goods
  • Any assist, if its value is not included in the cost of materials and fabrication
  • The cost of containers and packing, if their values are not included in the cost of materials and fabrication
• The Bureau cannot compel a person residing outside the Philippines to produce or allow access to any account or record for determining a computed value