The draft customs administrative order (CAO) on the tax- and duty-exempt privileges for importations of personal and household effects by returning residents and overseas Filipino workers (OFWs) now awaits public feedback.
Position papers on the draft CAO, just released by the pHILIPPINE Department of Finance (DOF) and Bureau of Customs (BOC), may be submitted until November 10, the day a public hearing on the regulation will be held.
The draft CAO is the latest to be released that will implement one of the provisions of the Customs Modernization and Tariff Act (CMTA) or Republic Act No. 10863. Specifically, the proposed CAO will operationalize Section 800 (f) Chapter 1, Title VIII, and other relevant sections of the CMTA.
READ: PH Customs modernization act signed into law
It covers conditionally tax- and/or duty-exempt importations of personal and household effects belonging to returning residents and OFWs, as well as the additional tax- and duty exemption privilege of OFWs for home appliances and other durables amounting to not more than P150,000.
Definition for a returning resident is a Filipino national who has stayed abroad for at least six months and is returning to the Philippines, and includes the dependent spouse and children.
OFWs, meanwhile, are all Filipinos working in a foreign country under employment contracts, regardless of their profession, skills, or employment status in a foreign country.
A separate CAO will cover consolidated shipment of duty- and tax-free balikbayan boxes.
Under the proposed order, household appliances, jewelry, precious stones, and other goods of luxury which were previously exported from the Philippines shall be exempt from duties and taxes when covered by a Certificate of Identification (CI) issued by the District Collector, or a customs officer duly authorized by the former, before departure from the Philippines.
The customs examiner shall verify the identity of the goods brought in against the CI.
To be exempt from duties, taxes and other charges, personal and household effects normally used for the comfort and convenience of the returning residents or OFWs during their stay abroad must accompany them on their return, or arrive not later than 60 calendar days after the owner’s return.
Importations of excisable articles such as distilled spirits, wines, cigars and cigarettes, and perfumes exceeding the allowable quantity to be prescribed by BOC will have to pay duties, taxes and other charges.
Physical examination or non-intrusive inspection will be conducted subject to existing regulations and based on established risk management scheme of BOC.
A returning resident or an OFW will enjoy tax and duty exemption on personal and household effects not exceeding the following Free Carrier (FCA) or Free on Board (FOB) values: P350,000 for those who have stayed in a foreign country for at least 10 years and have not availed of the privilege within 10 years prior to arrival; P250,000 for those who have stayed in a foreign country for five but not more 10 years and have not availed of the privilege within five years prior to arrival; and P150,000 for those who have stayed in a foreign country for less than five years and have not availed of the privilege within six months prior to return to the Philippines.
A returning OFW may also apply for an additional duty and tax exemption privilege for home appliances and other durables not exceeding P150,000 in value. This benefit can be enjoyed once in a calendar year, subject to several conditions.
Any amount in excess of the three thresholds is subject to the corresponding duties and taxes, the draft CAO notes.
Excluded from the privilege are luxury items, unless covered by a pre-departure CI. These include vehicles, watercraft, aircraft, animals, donations; goods intended for barter, sale, or hire; goods in commercial quantity and regulated goods in excess of the allowed limits; and prohibited and restricted goods.
BOC will issue a customs memorandum order prescribing the detailed procedures for lodging, processing, and clearing conditionally tax- and duty-exempt importation of personal and household effects, home appliances, and other durables of returning residents and OFWs. – Roumina Pablo
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