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Method of Valuation
Method of Valuation
SYSTEM
SEQUENTIAL APPLICATION OF VALUATION METHODS
TOPIC
RULES ON CUSTOMS VALUATION
METHOD 1: THE TRANSACTION VALUE
TOPIC
METHOD 3: THE TRANSACTION VALUE OF SIMILAR GOODS
Where the dutiable value cannot be determined under the Transaction Value
method, it is to be determined by proceeding sequentially through the succeeding
methods to the first such method under which the dutiable value can be determined
RULES ON CUSTOMS VALUATION
General Provision
However, if the dutiable value cannot be determined with the use of Method
One, the following valuation methods shall be applied in SEQUENTIAL
ORDER:
If the importer does not request that the order of Method Four and Method
Five be reversed, the normal order of the sequence shall be followed. If the
importer does so request but it then proves impossible to determine the dutiable
value under the provisions of Method Five, the dutiable value shall be determined
under the provisions of Method Four, if it can be so determined.
Where the DV cannot be determined under the provisions of Method One to Five, it
shall be determined under the provisions of Method Six
PRICE ACTUALLY PAID OR PAYABLE (PAPP)
The WVA itself provides no definition of a sale. It merely states that there
must be a specific commercial operation that meets certain requirements
and conditions. WCO Advisory Opinion 1.1 provides guidance in this
matter by elaborating on the concept of “sale” as it appears in the WVA. It
states that a sale may be described as follows:
In determining the dutiable value under the provisions of Method One, the
following adjustments shall be added to the price actually paid oy payable for the
imported goods being valued to the extent that they are incurred by the buyer,
provided there is objective and quantifiable data to form the basis of the
adjustments, and if such value has not been included in the price actually paid or
payable:
1. COMMISSIONS AND BROKERAGE FEES (Except Buying Commissions)
Includes selling commissions which are paid by the seller to his agent in the promotion and sale of
his products. Selling commission may take the form of an indentor’s commission, selling agent’s
commission, or manufacturer’s representative commission. -the term Brokerage fees refer to a
commission paid to a broker who arranges the transaction between a seller and a buyer.
BUYING COMMISSIONS-are fees paid by an importer to the importer’s agent for the service of
representing the importer abroad in the purchase of the goods being valued.
2. COST OF CONTAINERS
3. COST OF PACKING (whether for labor or materials)
4. ASSISTS
4.1 Materials, components, parts, and similar items incorporated in the imported goods
4.2 Tools, dies, moulds, and similar items used in the production of the imported goods
4.3 Materials consumed in the production of the imported goods
4.4 Engineering, development, artwork, design work, and plans, and sketches undertaken
elsewhere than in the Philippines and necessary for the production of the imported
goods
5. ROYALTIES AND LICENSE FEES
6. PROCEEDS
7. COST OF TRANSPORT
8. COST OF INSURANCE
9. POST IMPORTATION CHARGES/COSTS
The dutiable value must not include the following charges or costs, if they are
distinguished from the price actually paid or payable for the goods:
Similar goods are defined as goods which, although not alike in all
respects
Have like characteristics and like component materials
Are capable of performing the same functions as the goods being
valued
Are commercially interchangeable with the goods being valued
Are produced in the same country of the goods being valued
Are produced by the producer of the goods being valued
1. The imported goods or identical or similar imported goods have been sold in the Philippines
in the same condition as imported
2. Sales of the imported goods being valued or of identical or similar imported goods have
taken place at or about the same time of importation of the goods being valued (extending
45 days prior to and 45 days following the importation of the goods being valued)
3. The purchaser must not be related to the importer from whom he buys such goods
4. The purchaser in the Philippines must not have supplied assists, either directly or indirectly
A deductive value is determined by making a deduction
from the established price per unit for the aggregate of
the ff. elements:
As an example of this, goods are sold from a price list which grants
favorable unit prices for purchases made in larger quantities
Under this Method, the dutiable value is determined on the basis of the cost of production
of the goods being valued, plus an amount for profit and general expenses usually
reflected in sales from the country of exportation to the Philippines of goods of the same
class or kind.
The dutiable value may be calculated as follows: Determine the aggregate of the
relevant costs, charges, and expenses or the value of:
When the dutiable value cannot be determined under any of the previous methods
of valuation, it shall be determined by using other reasonable means consistent with
the principles and general provisions of GATT 1994, the WVA, and on basis of data
available in the Philippines.