International Shipping Can Be Tricky
You never know what is going to happen, if you wrote the right words on the package or if the package will be allowed through customs tax free or at all. The Philippines is no exception to this black hole atmosphere that surrounds international shipping.
What follows is an in-depth look at the shipping product samples to the Philippines.
Classifying the Product Sample
To ship anything, including product samples, there are 3 classifications the package will be labeled as. These classifications determine if the sample is allowed into the country, if it will be taxed or if it will be let through without any extra charges.
- Freely Importable Commodities – these items do not receive any extra levy of taxes or fees. You do not need any permission from any of the Philippine government offices to import these items. No regulations or prohibitions govern this category
- Regulated Commodities – this category does require permits and permission from the proper Philippine authorities. One of those agencies is found here.
- Prohibited or Banned Commodities -these products are not allowed under Philippine and they will not reach their intended destination. For a complete list of regulated and prohibited items click here.
Before you ship, the import status of any package you want to send to the Philippines must be checked with the following Philippine Government Agencies – Bureau of Customs, or the Bureau of Import Services of the Department of Trade and Industry.
Philippine Duty Reasons
You need to keep in mind that the Philippine Government has set their rules for the importing of different commodities and products.
These reasons are probably standard throughout the world:
- The protection of the public’s health and safety
- To preserve national security
- To honor international commitments, and
- The protection of the local industry
These are not unreasonable regulations and they help to clarify why some products fall into the freely import and the regulated import categories.
What Value Marks the Demarcation Line
The Philippine Government has established a certain value marker which helps them apply the different taxes or fees on those regulated products. If the product is determined to be worth more than that import demarcation line, then a fee will be attached to each package.
This demarcation line is officially called ‘de minimis’ value. The line used to reside at 10 Philippine pesos but in 2016 it was raised up to 10,000 Philippine pesos. Whether for duty or tax, the ‘de minimis’ value line is a constant 10,000 PHP or $200 US approx.
There are two things that need to be done by any importer or shipper to the Philippines to qualify for the under 10,000 exemption:
- The declared value must be stated in the shipping documents or merchants’ invoice
- Any package containing the words “without commercial value” or “of no commercial value” will be disqualified from receiving this exemption
The duty fee or tax that may be charged to your package may be assessed the average rate of 6.7%. It can be more or less, depending on the actual cost of Philippine domestic consumption.
**An important note: do not assume these standards are followed religiously and consistently. Some customs officials may go by the 10PHP rate, the $75 USD value marker or if the package weighs 10 Kgs. or less.
The Important Documents
Every package is going to need to have a paper trail. These documents are basically a must have for every package sent to the Philippines.
Some depend on if a request has been made by the Philippine custom offices or manner of shipping:
- A Commercial invoice or a Pro forma invoice or both
- A Certificate of Origin
- A Packing list
- An Applicable special certificates/import clearance/permit
- Commercial Invoice of Returned Philippine Goods and/or Supplemental Declaration on Valuation
Why are Some Product Samples Assessed a Fee and Others Are Not
The most logical reason is that the Philippine government agents and agencies in charge of assessing those fees do not know what the product is going to be used for.
In other words, they won’t determine if the contents of the package are imported to compete with similar local products or if they are used for business purposes only. For example, Photos for your Amazon product pages.
They do not know the purpose of the item and if the words ‘of no commercial value’ appear on the packaging then the package will be assessed a fee. Also, the Philippines has removed tariffs from imports that originate from their ASEAN trading partners. The ASEAN member countries are: Philippines, Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Singapore, Thailand and Viet Nam.
This exclusion is found under the ASEAN Free Trade Area (AFTA) agreement. Those imported packages not classified under the above international trade agreement but come from a most favored nation status then the package will receive the standard 7.1% duty.
What Does All this Mean
It means that even product samples are not excluded from the Philippine import regulations. If they do not meet the exclusionary rules, then the receiver will be assessed a duty if they want to receive their package.
Besides removing words ‘of no commercial value’, etc, the shipper must make sure that there is a proper paper trail and that the paperwork is in order. If the shipper resides in a country out of the ASEAN trade agreement, then the receiver should be ready to be assessed a small fee.
Some Final Words
Of course, this information also depends on the mood of the agents in charge of assessing the fees. This is something that is out of almost everyone’s control. The standards may not be followed strictly and some packages that are too regulated may be assessed a fee when they shouldn’t.
Just make sure to follow all the international shipping rules and regulations and the fees should drop. If you have any questions do not hesitate to contact us or email us at [email protected] and we will be glad to help you with your shipping questions.