How To Compute Customs Duties and Taxes.

Computation of Duties and taxes are so complex. For those who is not in a custom brokerage or import industry here are simple sample of computation.

Basic Formula

Duties and Taxes =	Custom Duty
	+ VAT
	+ IPF
	+ Excise Tax(If Applicable)

How to arrive at Custom Duty

Customs Duty =	Customs Value(Dutiable Value) x Foreign Exchange Rate x Rate of Duty
Dutiable Value =	Cost of Goods + Freight + Insurance + Other Charges and Costs
Exchange Rate =	As published weekly through custom memorandum Circular

How to arrive at VAT

VAT =	12% of Total Landed Cost(TLC)
TLC =	Dutiable Value + Bank Charges + Custom Duty + Brokerage Fee + Arrastre Charge + Wharfage Charge + Wharfage Due + Custom Documentary Stamp(CDS) + Import Processing Fee (IPF)

How to arrive at IPF

Dutiable Value of Shipment	IPF
Up to P250,000 Over P250,000 to P500,000 Over P500,000 to P750,000 Over P750,000	P 250.00 P 500.00 P 750.00 P 1000.00

Goodnews: No fees for IPF on personal effect, balikbayan boxes as of Dec 2014.

Sample Computation

Invoice Sample

Item # Product   Qty     Price Each   Total Price KFMSTPP   POINTED PETAL KANZASHI FLOWER MAKER SET 1 $13.99 $13.99 KFMSTRP   ROUND PETAL KANZASHI FLOWER MAKER SET 1 $13.99 $13.99 KFMSTGP   GATHERED PETAL KANZASHI FLOWER MAKER SET 1 $13.99 $13.99 KFMSTOR   ORCHID KANZASHI FLOWER MAKER SET 1 $13.99 $13.99 Merchandise Subtotal: $55.96 Shipping: $21.99 Tax: $0.00 Total: $77.95

The Formula is 

Duties and Taxes = Duty + VAT + IPF

Duty = Total prices of the product  + Shipping x Rate of duty(see tariff commision)

    $55.96 - Total price of the product(dutiable value)

+  $21.99 - Shipping

x    15%   - Rate of duty (Based on tariff of custom code of the philippines)

-------------

= $11.69 convert this to Philippine peso it should be depend on the current peso to dollar conversion

now is Php 44.426 = USD 1.00 (so $11.69 x 44.426 =519.33)

Duties and taxes = Php519.33 duty

                                 +12%(php62.31)VAT

                                 +250      IPF 

-------------------------------------------

                            = 831.64 Duties and Taxes

See also: Tips sending parcel to the Philippines

See also: How To Claim your parcel or package at Post Office Philippines.

See also: My personal experience in Releasing my package.