- Who are entitled to duty- and tax-free privileges?
- Are balikbayans also entitled to certain duty- and tax-free privileges?
- What is the extent of duty- and tax-free privilege of returning Filipinos/balikbayans?
- Are family members of returning residents, OFWs, and former Filipinos also entitled to certain privileges?
- What are the conditions and limitations attached to tax exemption privileges?
1. WHO ARE ENTITLED TO DUTY AND TAX FREE PRIVILEGES?
Section 800 of Republic Act 10863 or the Customs Modernization and Tariff Act provides duty and tax free privileges to the following individuals, the extent of which depends on their particular status:
a. Returning Resident. A Returning shall shall refer to nationals who have stayed in a foreign country for a period of at least six (6) months.
b. Overseas Filipino Workers (OFWs) refer to holders of valid passports issued by the Department of Foreign Affairs (DFA) and certified by the Department of Labor and Employment (DOLE) or the Philippine Overseas Employment Association (POEA) for overseas employment purposes. They cover all Filipinos working in a foreign country under employment contract.
c. Overseas Filipino. Persons coming to settle in the Philippines or Filipinos or their families and descendants who are now residents or citizens of other countries.
2. ARE BALIKBAYANS ALSO ENTITLED TO CERTAIN DUTY AND TAX FREE PRIVILEGES?
BALIKBAYAN is another term for an OFW or a former Filipino. A returning resident is also a BALIKBAYAN when he has stayed abroad for at least one year. Balikbayans are entitled to conditionally duty and tax free privileges.
3. WHAT IS THE EXTENT OF DUTY AND TAX FREE PRIVILEGE OF RETURNING FILIPINOS/BALIKBAYANS?
The extent varies as follows:
a. Returning Resident. Personal and household effects belonging to returning residents including household appliances, jewelry, precious stones, and other goods of luxury which were formally declared and listed before departure and identified before the District Collector when exported from the Philippines by such returning residents; personal and household effects including wearing apparel, goods of personal adornment, toilet goods, instruments related to one’s profession and other personal and household effects of the same kind except luxury items. Returning residents shall have tax and duty exemption on personal and household effects provided that:
- It is not in commercial quantity;
- It is not intended for barter, sale or for hire; and
- Limited to the value of:
- Three hundred fifty thousand pesos (Php. 350,000.00) for those who have stayed in a foreign country for at least ten (10) years and have not avail of this privilege within the ten (10) years prior to returning resident’s arrival;
- Two hundred fifty thousand pesos (Php. 250,000.00) for those who have stayed in a foreign country for at least five (5) years, but not more than ten (10) years and have not avail of this privilege within five (5) years prior to returning resident’s arrival
- One hundred fifty thousand pesos (Php. 150,000.00) for those who have stayed in a foreign country for less than five (5) years and have not avail of this privilege within six (6) months prior to returning resident’s arrival
b. Overseas Filipino Worker (OFW). In addition to the privileges granted to Returning Residents as described above, an OFW may be allowed to bring in, tax and duty – free home appliances and other durables, limited to one of every kind once in a given calendar year accompanying them on their return or arriving within sixty (60) days after every OFWs return providing further that it shall not exceed the value of one hundred fifty thousand pesos (Php.150,000.00).
Residents of the Philippines, OFWs, or their Filipinos while residing abroad or upon their return to the Philippines shall be allowed to bring in or sent to their families and relatives in the Philippines balikbayan boxes which shall be exempt from applicable duties and taxes imposed under the NIRC of 1997; provided that:
- balikbayan boxes contain personal and household effects only and shall not be in commercial quantities nor intended for barter, sale or for hire;
- it shall not exceed one hundred fifty thousand pesos (Php. 150,000.00)
- this privilege is only availed of up to three (3) times in a calendar year; and
- any amount in excess of the allowable non – dutiable value shall be subject to the applicable duties and taxes
c. Overseas Filipino. Professional instruments and implements, tools of trade occupation or employment, wearing apparel, domestic animals, and personal household effects in quantities and of the class suitable to the profession or rank, or position of the persons importing said items.
It shall be exempt from payment of Customs duties and taxes provided that the bureau may, upon the production of satisfactory evidence that such persons are actually coming to settle in the Philippines and that the goods are brought from their former place of abode except vehicles, aircrafts, machinery.
4. ARE FAMILY MEMBERS OF RETURNING RESIDENTS, OFWs AND FORMER FILIPINOS ALSO ENTITLED TO CERTAIN PRIVILEGES?
Yes, under the provision of CMTA Sec. 800(g).
5. WHAT ARE THE CONDITIONS AND LIMITATIONS ATTACHED TO TAX EXEMPTION PRIVILEGES?
The following are the conditions for availment of duty and tax privileges;
- Presentation to the Bureau of Customs of a favorable written endorsement which department controls the availment of duty and tax free exemptions.
- The goods extended duty and tax free privilege are not to be sold, bartered nor traded.
- The quantity is not commercial.
- The goods are not prohibited importations. (Prohibited/Restricted Importations)
- For regulated items, endorsements from the proper regulatory agency. (Pet/Animals & Household Plants)