Article 106p. 106

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

the preceding method, the dutiable value shall be the

deductive

value

unless

otherwise

requested

by

the

importer as provided in Section 700 hereof. The deductive

value which shall be based on the unit price at which the

imported goods or identical or similar imported goods

are sold in the Philippines, in the same condition as when

imported, in the greatest aggregate quantity, at or about

the time of the importation of the goods being valued, to

persons not related to the persons from whom they buy

such goods, subject to deductions for the following:

(1) Either the commissions usually paid or agreed to

be paid or the additions usually made for profit and

general

expenses

in

connection

with

sales

in such

country of imported goods of the same class or kind;

(2) The usual costs of transport and insurance and

associated costs incurred within the Philippines;

(3) Where appropriate, the costs of: (i) transport of the

imported goods from the port of exportation to the port

of entry in the Philippines; (ii) 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 (iii) insurance; and

(4) The customs duties and other national taxes

payable in the Philippines by reason of the importation or

sale of the goods.

If neither the imported goods nor identical nor similar

imported

goods

are

sold

at

or

about

the

time of

importation of the goods being valued in the Philippines

in the conditions they were imported, the customs value

shall, subject to the conditions set forth in the preceding

paragraph, be based on the unit price at which the

imported goods or identical or similar imported goods

sold

in

the

Philippines

in

the

condition they were

imported and at the earliest date after the importation of

the goods being valued, but before the expiration of

ninety (90) days after such importation.

If neither the imported goods nor identical nor similar

imported

goods

are

sold

in

the

Philippines in the

condition as imported, then, if the importer so requests,

the dutiable value shall be based on the unit price at

which the imported goods, after further processing, are

sold in the greatest aggregate quantity to persons in the

Philippines who are not related to the persons from

whom they buy such goods, subject to allowance for the

value added by such processing and deductions provided

under subsections (1), (2), (3) and (4) hereof.

SECTION 705. Computed Value — Method Five. —

Where the dutiable value cannot be determined under

the preceding method, the dutiable value shall be the

computed value of the sum of:

(1) The cost or the value of materials and fabrication or

other processing employed in producing the imported

goods;

(2) The amount for profit and general expenses equal

to that usually reflected in the sale of goods of the same

class or kind as the goods being valued which are made

by producers in the country of exportation for export to

the Philippines;

(3)

The

freight,

insurance

fees

and

other

transportation expenses for the importation of the goods;

(4) Any assist, if its value is not included under

paragraph (1) hereof; and

(5) The cost of containers and packing, if their values

are not included under paragraph (1) hereof.

The Bureau shall not require or compel any person

not

residing

in

the

Philippines

to

produce

for

examination, or to allow access to, any account or other

record for the purpose of determining a computed value.

However, information supplied by the producer of the

goods for the purposes of determining the customs value

may be verified in another country with the agreement of

the producer and provided that said producer will give

sufficient advance notice to the government of the

country in question and that the latter does not object to

the investigation.

SECTION 706. Fallback Value — Method Six. — If the

dutiable

value

cannot

be

determined

under

the

preceding

methods

described

above,

it

shall

be

determined by using other reasonable means and on the

basis of data available in the Philippines. If the importer

so requests, the importer shall be informed in writing of

the dutiable value determined under method six and the

method used to determine such value.

No dutiable value shall be determined under method

six on the basis of:

(1) The selling price in the Philippines of goods

produced in the Philippines;

(2) A system that provides for the acceptance for

customs purposes of the higher of two (2) alternative

values;

(3) The price of goods in the domestic market of the

country of exportation;

(4) The cost of production, other than computed

values, that have been determined for identical or similar

goods in accordance with method five hereof;

(5) The price of goods for export to a country other

than the Philippines;

(6) Minimum customs values; or

(7) Arbitrary or fictitious values.

SECTION 707. Ascertainment of the Accuracy of the

Declared Value. — Nothing in this section shall be

construed as restricting or calling into question the right

of the Bureau to ascertain the truth or accuracy of any

statement,

document

or

declaration

presented

for

customs valuation purposes. When a declaration has

been presented and when the Bureau has reason to

doubt the truth or accuracy of the particulars or of

documents produced in support of such declaration, it

may ask the importer to provide further explanation,

including documents or other evidence, that the declared

value

represents

the

total

amount

actually

paid or

payable for the imported goods, adjusted in accordance

with the provisions of Section 701 of this Act.

If in the course of determining the dutiable value of

imported goods, it becomes necessary to delay the final

determination of such dutiable value, the importer shall

nevertheless

be

able

to

secure

the

release

of

the

imported goods upon posting of a sufficient security in

an amount equivalent to the duties and taxes in dispute

conditioned on the payment of additional duties and

taxes, if any, as may be determined: Provided , That

prohibited

goods

shall

not

be

released

under

any

circumstance.

If,

after

receiving

further

information,

or

in

the

absence of a response, the Bureau still has reasonable

doubts on the truth or accuracy of the declared value, it

may deem that the customs value of the imported goods

cannot

be

determined

under

method

one,

without

prejudice to an importer's right to appeal pursuant to

Section 1104 of this Act. Before taking a final decision, the

District Collector shall communicate to the importer, in

writing if requested, the grounds for doubting the truth

or accuracy of the particulars or documents produced

and

give

the

importer

a reasonable opportunity to

respond. When a final decision is made, the Bureau shall

communicate its decision and the grounds therefor in

writing.

SECTION 708. Exchange Rate. — For the assessment

and collection of import duty upon imported goods and

for other purposes, the value and prices thereof quoted in

foreign currency shall be converted into the currency of

the Philippines at the current rate of exchange or value

specified or published, from time to time, by the Bangko

Sentral ng Pilipinas (BSP).

© Compiled by RGL

106 of 201