BOC order applies conditional tax, duty exemption on returning OFWs’ imports

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The Bureau of Customs (BOC) has released the guidelines implementing conditional tax and duty exemption on the importations of returning Philippine residents and returning overseas Filipino workers (OFWs).

Customs Memorandum Order (CMO) No. 15-2017, signed by then customs commissioner Nicanor Faeldon, implements Customs Administrative Order (CAO) No. 06-2016, which in turn executes Section 800 (f) Chapter 1, Title VIII , and other relevant sections of Republic Act (RA) No. 10863, otherwise known as Customs Modernization and Tariff Act or CMTA.

The CAO covers conditionally tax- and/or duty-exempt importations of personal and household effects belonging to returning residents and returning 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.

A separate order, CAO 05-2016, covers the consolidated shipment of duty- and tax-free balikbayan (personal effects) boxes.

Under CMO 15-2017, returning residents and returning OFWs availing of the privilege shall apply with the Revenue Office of the Department of Finance (DOF) for the issuance of a Tax Exemption Indorsement (TEI, formerly Tax Exemption Certificate).

They shall submit the application for TEI to the DOF, either personally or through a representative with a duly notarized authorization, together with the required documents under CMO 15-2017.

To expedite cargo clearance formalities, the returning resident, returning OFW, or authorized representative shall accomplish, sign, and submit to BOC a Personal and Household Effects Declaration (PHED), which may be downloaded from the BOC website or secured at customs arrival areas.

If the returning resident or returning OFW opts for the conditional release of the shipments arriving before their actual date of return to the country, he shall submit the PHED in advance to BOC’s Informal Entry Division or the equivalent unit of the concerned port for cargo clearance formalities.

For shipments arriving as accompanied baggage, the returning resident or retuning OFW shall submit to the customs officer the accomplished PHED form upon arrival.

Shipments arriving in advance of the date of the returning resident or returning OFW and without the requisite TEI may be allowed conditional release if a cash bond equivalent to 100% of the assessed duties and taxes is posted.

Personal effects and household goods shipped together with personally owned motor vehicles, even if stowed in one shipping or aircraft container, shall be covered by separate bill of lading (B/L)/air waybill (AWB). The motor vehicle shall be cleared under the formal entry process and subject to existing rules and regulations, as importation of personally owned motor vehicles is not entitled to the exemption granted under Section 800 (f) of the CMTA.

If a single B/L/AWB has been issued for these goods, the consignee or his authorized representative shall make a formal request with the collector of customs to amend the manifest and split the B/L/AWB.

All shipments covered by CMO 15-2017 are subjected to non-intrusive inspection. To prevent delays in the processing and release of personal effects and household items, any alert orders against such shipments may be issued only after the mandatory non-intrusive inspection.

Pending full automation, the procedures for the advance submission of the electronic inward foreign manifest and clearance of cargoes under the informal entry process shall be observed.

If the returning resident or returning OFW fails to submit to BOC the TEI from the DOF, the indorsement needed to support his claim to the privilege, within 45 days of arrival but not exceeding 60 days from the release of the shipment, he forfeits the cash bond posted to cover the payment of duties and taxes.

The following, meanwhile, are not entitled to the exemption granted under Section 800 (f) of the CMTA: luxury items, unless covered by a pre-departure Certificate of Identification; vehicles; watercraft; aircraft; animals; donations; goods intended for barter, sale, or hire; goods in commercial quantity; and regulated goods exceeding the limits allowed. – Roumina Pablo

 Image courtesy of yodiyim at FreeDigitalPhotos.net

4 COMMENTS

  1. hello,
    Meann here from Comglasco, may I ask about the provisional release for PPE (FACE MASK, according to the courier this may release without paying duties and taxes as all PPE’s are now exempted for D/T. However we need to apply TEI to DOF. what are the requirements that we need to send to DOF right after quarantine.

    Looking forward to your response.

    • To avail of the duty and tax exemption on the importation of international donation, a Tax Exemption Indorsement (TEI) must be secured from the Department of Finance’s (DOF) Revenue Office.

      The requirements in applying for a TEI include a recommendation/endorsement for duty and/or tax-exempt from the appropriate government agency (e.g. DSWD, National Economic and Development Authority, DepEd, Commission on Higher Education, etc.); letter request addressed to the secretary of finance (Attention: Director IV, Revenue Office); import bill of lading (BL)/airway bill (AWB); import invoice; packing list (PL); Deed of Donation; and other documents, as may be required by DOF.

      The approved TEI will be transmitted by DOF’s Central Records Management Division to BOC’s Tax Exempt Division for transmittal to the proper BOC collection district for processing.

      https://www.portcalls.com/boc-foreign-donations-subject-to-customs-duties/

  2. Hi!
    Per BOC, for OFWs to enjoy the privilege of sending duty-free balikbayan boxes, they have to get a Tax Exemption Indorsement from DoF. May I know the requirements & process in securing the aforementioned TEI?
    Thank you

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