CONGRESS OF THE PHILIPPINES
Metro Manila
Tenth Congress
First Regular Session
Begun and held in Metro Manila, on Monday, the Twenty-fourth day of July, nineteen hundred
and ninety-five.
Republic Act No. 8181
TRANSACTION VALUE ACT
AN ACT CHANGING THE BASIS OF DUTIABLE VALUE OF IMPORTED ARTICLES
SUBJECT TO AN AD VALOREM RATE OF DUTY FROM HOME CONSUMPTION VALUE
(HCV) TO TRANSACTION VALUE (TV) AMENDING FOR THE PURPOSE SECTION 201 OF
TITLE II, PART I OF PRESIDENTIAL DECREE NO. 1464, OTHERWISE KNOWN AS THE
TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED, AND FOR OTHER
PURPOSES.
Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled.
SECTION 1. Section 201 of Title II, Part I of the Tariff and Customs Code of the Philippines, as
amended, is hereby further amended to read as follows:
SEC. 201. Basis of Dutiable Value - The dutiable value of an imported article subject to
an ad valorem rate of duty shall be transaction value, which shall be the price actually
paid or payable for the goods when sold for export to the Philippines, adjusted by adding
the following to the extent that they are incurred by the buyer but are not included in the
price actually paid or payable for the imported goods.
(a) Commissions and brokerage fees (except buying commissions); cost of
containers; and the cost of packing, whether for labour or materials.
(b) The value of materials, components, parts and items incorporated in the
imported goods; tools; dies; moulds and similar items used in the production
of the imported goods; materials consumed in the production of imported
goods; and engineering, development, artwork, design work, and plans and
sketches undertaken elsewhere than in the Philippines and necessary for the
production of imported goods, to the extent that such value has not been
included in the price actually paid or payable;
(c) The amount of royalties and license fees that the buyer must pay, either
directly or indirectly, in connection with the goods being valued, as a
condition of sale of the goods to the buyer.
(d) The value of any part of the process of any subsequent resale, disposal or
use of the imported goods that accrues directly of indirectly to the seller;
(e) The cost of transport of the imported goods from the port of exportation to the
entry in the Philippines;
(f) 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
(g) The cost of insurance.
Where the Commissioner of Customs has reason to doubt the truth or accuracy of the declaration
or particulars or documents provided in support of declared value of the importation, he may
require the importer to give further explanation thereof and to submit additional documents or
other evidence, to show that the declared value represents the total amount paid or payable for
the imported goods.
If after receiving the explanation of the importer the Commissioner of Customs still has
reasonable doubt as to the accuracy of the declared value, the Commissioner of Customs may
proceed with the alternative methods specified hereafter, as follows:
The dutiable value shall be transaction value of identical goods sold for export to the Philippines
at or about the date of exportation of the goods being valued;
If the dutiable value cannot be determined under the preceding method, it shall be the transaction
value of similar goods sold for export to the Philippines at or about the date of exportation of the
goods being valued;
If the dutiable value still cannot be determined through the successive application of the two
immediately preceding methods, the order of succession of the following methods may be
reversed upon request of the importer unless the Commissioner of Customs deems that he will
experience real difficulties in determining the dutiable value, in which case the Commissioner of
Customs may refuse such a request subject to the provisions of the General Agreement Act on
Tariffs and Trade (GATT) 1994 and the Uruguay Round Final Act, in which event the valuation of
the imported goods shall be determined as indicated hereunder.
(1) The unit price at which the imported goods or identical or similar imported goods are
sold domestically, in the same condition as when imported, in the greatest aggregate
quantity, to persons not related to the seller, at or about the time of the importation of
the goods being valued, subject to the applicable deductions as provided under the
GATT 1994 and the Uruguay Round Final Act, or
(2) The computed value which shall be the sum of:
(a) The cost or value of raw materials employed in producing the imported goods,
(b) The amount for profit and general expenses equal to the amount for profit and
general expenses as reflected in the sale of goods of the same class or kind as
the goods being valued which are made by the producers in the country for
exportation for the country of transportation for the Philippines, and
(c) The freight, insurance fees and other transportation expenses for the importation
of the goods;
If the dutiable value cannot be determined under any preceding methods described above, it shall
be determined by using other reasonable means consistent with the principles and general
provisions of GATT 1994, the agreement on the implementation of Article VII of the General
Agreement of Tariffs and Trade as contained in the Uruguay Round Final Act, and on the basis of
data available in the Philippines.
The correct dutiable value of the imported goods referred to above shall be ascertained by the
Commissioner of Customs from reports of revenue or commercial attaches or other Philippine
diplomatic officers and from such other sources of information as may be available to the Bureau
of Customs. Such values shall be established and published by the Commissioner of Customs
from time to time, and such values shall be binding upon the importers and the Bureau of
Customs until changed and new value or values are similarly established and published.
Values shall be published in at least one (1) newspaper of general circulation and other
publications readily available to the public. Any importer or other interested party who is
dissatisfied with the published value shall have fifteen (15) days from the of such published value
the opportunity to file protest on the questioned value and the Commissioner of Customs shall
resolve the protest within fifteen (15) days from receipt of such protest, either by amending the
published value or retaining the same. Whatever his decision may be likewise be published.
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 may secure the release of the
imported goods upon the filing of a bond which shall be solely in cash, in an amount equivalent to
the imposable duties and taxes on the imported goods in question [plus twenty five percent (25%)
thereof, conditioned upon the payment if the customs duties and taxes for which the imported
goods may be liable: Provided, however, that goods the importation of which is prohibited by the
law shall not be released under any circumstance whatsoever.]
For purposes of the preceding paragraphs, the terms:
(1) "Reasonable doubt" shall refer to any condition that creates probable cause to make the
Commissioner of Customs believe in the inaccuracy of the invoice value of imported
goods as reflected by the importer in his custom declaration, for valuation purposes.
Such condition may include but is not limited to any of the foll owing situations:
(a) If the sale or price list subject to some consideration for which a value cannot be
determined with respect to the goods being valued such as:
(i) When the seller fixes the price of the imported goods on condition that
the buyer will also buy other goods in specified quantities;
(ii) When the price of the imported goods is dependent upon the price or
prices at which the buyer of the imported goods to the seller.
(iii) When the price is established on the basis of a form of payment
extraneous to the imported goods, such as where the imported goods
are semi-finished goods which have been provided by the seller on the
condition that he will receive a specified quantity of finished goods;
(b) Or, if part of the proceeds of any subsequent resale, disposal or use of the goods
by the buyer will accrue directly or indirectly to the seller, unless an appropriate
adjustment can be made in accordance with the provisions of Article 8 of the
agreement in the implementation of Article VII of the General Agreement on
Tariffs and Trade as contained in the Uruguay Round Final Act; and
(c) If the buyer and seller are related to one another, and such relationship
influenced the price of the goods. Such persons shall be deemed related if:
(i) They are officers or directors of one another's business;
(ii) They are legally recognized partners in the business;
(iii) They are employer and employee;
(iv) Any person directly or indirectly owns, controls,or holds five percent
(5%) or more of the outstanding voting stock or share of both seller
and buyer;
(v) One of them directly or indirectly controls the other;
(vi) Both of them are directly or indirectly control a third person; or
(vii) Together they directly or indirectly control a third person; or
(viii) They are members of the same family including brothers and sisters,
(whether by whole or half blood) spouse, ancestor, and lineal
descendant.
(2) "Identical Goods" shall mean goods which are the same in all respects, including physical
characteristics, quality and reputation. Minor differences in appearances shall not
preclude goods otherwise conforming to the definition from being regarded as identical.
(3) "Similar Goods" shall mean goods which, although not alike in all respects, have like
characteristics and like components, materials which enable them to perform the same
function and to be commercially interchangeable. The quality of the goods, their
reputation and the existence of a trademark shall be among the factors to be considered
in determining whether goods are similar.
SECTION 2. Transitory Provisions - Upon the effectivity of this Act and until such time when the
Congress authorizes the shift to transaction value before January 1, 2000 as provided under
Section 3 of this act, the dutiable value of an imported article subject to an ad valorem rate of duty
shall be based on the export value at which, at the time of exportation, the same or identical, like,
or similar article is freely offered for sale in the principal export markets of exporting country for
exportation to the Philippines, in the usual wholesale quantities and in the ordinary course of
trade (excluding internal excise to be remitted or rebated) or where there is none on such date,
then on the export value nearest to the date of exportation, including the value of all containers,
coverings and/or packings of any kind and all other expenses, cost and charges incident to
placing the article in a condition ready for the Philippines, and freight, as well as insurance
premium covering the transportation of such articles to the port of entry to the Philippines.
Where the export value of the article cannot be ascertained thereat or there exists a reasonable
doubt as to fairness of such value, then the export value of the article shall be the export value of
such article for exportation to the Philippines if the principal export markets of the country of
manufacture or origin, is not the country of exportation.
Where the dutiable value cannot be ascertained as provided in the preceding paragraphs, or
where there exists a reasonable doubt as to the dutiable value of the imported article declared in
the entry, the dutiable value shall be domestic wholesale selling price of such or similar article in
Metro Manila or other principal markets in the Philippines on the date the duty becomes payable
on the article under appeasement, in the usual wholesale quantities and in the ordinary course of
trade, minus:
(a) Not more than twenty-five percent (25%) of the domestic wholesale selling price for
expenses and profits, and
(b) Duties and Taxes paid thereon
The correct dutiable value of imported articles shall be ascertained by the Commissioner of
Customs using for that purpose reports of Revenue or Commercial Attaches or other Philippine
diplomatic officers or such other of sources of information that may be available to the Bureau of
Customs, such values shall be published from time to time.
Values shall be published in a manner that will make them readily available to the public. Any
importer or other interested party who is dissatisfied with the published value shall have fifteen
days (15) from the date of publication of such published values the opportunity to file protest on
the questioned value, and the Commissioner of Customs shall resolve the protest within fifteen
days from such protest either by amending the published value or retaining the same. Whatever
his decision may be likewise published.
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 may secure the release of the
imported article upon the filing of a bond which shall solely be in cash in a amount equivalent of
the imposable duties and taxes on the imported goods in question plus twenty-five (25%) thereof,
conditioned upon the payment of customs duties and taxes for which the imported goods may be
liable: Provided however, that imported goods the importation of which is prohibited by the law
shall not be released under any circumstances whatsoever.
SECTION 3. In the interest of national economy, general welfare and/ or national security, the
Congress shall, upon recommendation of the President, by joint resolution, order the shift to
transaction value, as provided under Section 1 of this Act, as the basis of dutiable value of an
imported article subject to an ad valorem rate of any duty even before January 1, 2000.
SECTION 4. The Secretary of Finance shall, upon the recommendation of the Commissioner of
Customs, promulgate the necessary rules and regulations for the effective implementation of this
Act.
SECTION 5. The Commissioner of Customs may delegate his power to determine dutiable values
and to release imported goods under cash bond as provided in this law in cases where there are
no established and published values covering the importation: Provided, That in such cases, the
Collector of Customs concerned shall immediately render a complete report to the Commissioner
of Customs and the latter shall, without delay, establish and publish the correct dutiable value or
values for the importation, after which all Collectors of Customs shall be guided accordingly in the
assessment of import duties and taxes on similar or like importations.
SECTION 6. The Commissioner of Customs shall create such body or bodies to receive and hear
protest regarding published values. Such bodies shall hear and receive the evidence and shall
submit its or their recommendations to the Commissioner of Customs. The hearing body shall
submit its report in writing and shall convey to all interesting parties whatever the decision
reached by the commissioner thereon. During the effectivity of any published values, any
interested party may petition the Commissioner of Customs for a review of the published value for
the purpose of raising and lowering such value.
SECTION 7. All laws, decrees, executive orders, rules and regulations and other issuances and
parts thereof which are inconsistent with this Act are hereby repealed or modified accordingly.
SECTION 8. This Act shall take effect fifteen (15) days after its complete publicat ion in the Official
Gazette or in at least two (2) newspapers of general circulation, which date comes earlier.
Approved,
NEPTALI GONZALES JOSE DE VENECIA, JR.
President of the Senate Speaker of the House of Representative
This Act which is a consolidation of House Bill No. 3946 and Senate Bill No. 1461 was finally
passed by the House of Representatives and the Senate on March 27, 1996.
HELEN P. CACUTAN CAMILO L. SABIO
Secretary of the Senate Secretary General, House of Representative
Approved:
MARCH 28, 1996
FIDEL V. RAMOS
President of the Philippines
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