• What is Transaction Value?
• What is Home Consumption Value?
• Who stand to benefit from the shift from HCV to TV?
• What if the local manufacturer does not pass on the savings in production cost to the local consumer?
• Does the new system have the support of the private sector?
• What is the DTI position on the shift from HCV to TV?
• How is the dutiable value of an imported item computed under TV system?
• Are there cases when the invoice amount does not cover the above costs?
• What documents must the importer submit to support the declared transaction value?
• What documents must the importer submit to support the declared transaction value?
• Can the BOC question the accuracy of the declared transaction value?
• How can the BOC check the accuracy of the goods' declared value?

• What are identical goods?
• What are similar goods?
• Is there any other way to determine the dutiable value aside form the methods discussed above?
• How can an importer avoid delays in cases when the final dutiable value of the goods imported has yet to be determined?
• When are buyers/importers and sellers/exporters considered related?
• What is export value?
• How is the dutiable value computed under the export value system?
• How will BOC check the accuracy of a questionable export value declaration?
• Can the Commissioner of BOC delegate his power to determine the dutiable value of an imported good or release imports that are under cash bond?
• Will the BOC publish the export value of imported goods for the public's information?
• Can an importer question the export value published by the BOC?
• Where are protests filed?

Home Consumption Value or HCV is the wholesale price in the domestic market of the country of manufacture or export on the date of exportation of the same, like or similar goods (excluding internal excise taxes to be remitted or rebated). It is considered a protectionist valuation system. In the Philippines it has discouraged open competition in the market which resulted in the decline of local industries. It has also slowed down business expansion because of higher import and production costs which affect the country's competitiveness both in the domestic or home and foreign markets. The HCV system has also contributed to inflation in that it tends to increase the prices of goods in the local market.

The change in the valuation system will benefit the local manufacturers, exporters, importers, the country as whole and more importantly, the Filipino consumer.

The Filipino manufacturer or producer will benefit from the TV system in terms of reduced raw material costs. This in turn translates to lower production costs which enable him to price his products more competitively for the domestic and forein markets, if he is an exporter.

The shift to Transaction Value will allow the Philippines to align its valuation system not only with its ASEAN neighbors, but with the rest of the world. This system will lead to the adoption of an international standard which conforms with the GATT-World Trade Organization (GATT-WTO) because there is a precise set of rules that ensures a fair system of valuation. It adheres to the GATT-WTO objective that valuation procedures should not be used to combat dumping. Moreover, TV is based on the price actually paid in commercial practice. It is also neutral because there is no distinction between the sources of supply.

But the biggest gainer is the Filipino consumer in terms of lower prices and a wider selection of goods available to him. This will happen because the cost of the raw materials used on the product is reduced.

1. Cost actually incurred by the importer in the form of:
   

   commissions and brokerage, except buying commissions; cost of containers; cost of packaging (whether labor or materials)

2. Appropriate portion of the value of goods and services supplied directly or indirectly by the importer at reduced cost for use in the production and export of the goods:
   

   materials, components, parts and similar items included in the goods; tools, dies, mould and similar items used in production; materials consumed in production; necessary engineering, development, artwork, designs, plans and sketches done outside the Philippines.

3. Royalties and license fees as a condition for the sale;
   
   
4. Proceeds earned due to subsequent resale, disposal or use of the imported goods which accrue directly or indirectly to the exporter;
   
   
5. Transport cost at the port of entry in the Philippines;
   
   
6. Loading, unloading and handling charges of imported goods at the port of entry; and
   
   
7. Insurance.

Yes. The BOC Commissioner can question the accuracy of the declared value, especially when the following conditions or situations are present:

1. The foreign seller/exporter fixes the prices of the imported goods on condition that the Filipino buyer/exporter will buy other goods in specified quantities from him;
   

   The foreign seller/exporter fixes the price of the imported product because the Filipino buyer/exporter will buy other products in sufficient quantities from him; The price of the imported product is tied with the price/s of the product the Filipino buyer/importer will sell the foreign seller/exporter; The price is based on an agreement between the foreign seller/exporter selling his semi-finished products to the Filipino buyer/importer for a specified quantity once these products are processed.

2. Part of the proceeds of any subsequent resale of the goods goes directly or indirectly to the seller/exporter, unless an appropriate adjustment is made in accordance with the provisions of the General Agreement on Tariffs and Trade (GATT).
   
   
3. The buyer/importer and seller/exporter are related and their relationship influences or affects the conditions of the sale of the imported goods.

The BOC Commissioner can use any of two ways to check the accuracy of the goods' declared value:

• Look for the transaction value of identical goods which were imported into the Philippines on or about the same date as the goods for being valued;
• Look for the transaction value of similar goods which were imported into the Philippines on or about the same date as the goods being valued;

If the dutiable value cannot be determined through the above methods, it may still be arrived at using measures consistent with the principles and general provisions of GATT:

1. Unit price at which the identical or similar imported goods are sold domestically to persons not related to the seller at or about the time of importation subject to deductions under GATT; or
   
   
2. The computed value, which is the sum of:
   

   the cost or value of raw materials used in production; the profit and general expenses in importing the goods which should be equal to the amount indicated in the sale of that good from its originating country; the freight, insurance, and other transportation expenses incurred in importing the goods.

Buyers/importers and sellers/exporters are considered related if:

• They are both officers or directors of each others businesses;
• They are legally recognized partners in business;
• One is the employer and the other his employee;
• One of them owns, controls or holds 5% or more of the outstanding voting stocks or shares, directly or indirectly, of the others' business;
• One of them, directly or indirectly, controls both their businesses;
• Together they control a third person; and
• They belong to the same family.

The export value of an imported good is the price of the imported item in the principal markets of the exporting country at the time it is shipped to the Philippines.

Between now and the year 2000 when Transaction Value will be fully implemented, the export value of the imported goods will be the basis for computing the dutiable value of Philippine imports.

The dutiable value of an imported good is the export value plus:

• The cost of all containers, covering and/or packings of any kind;
• All other costs, charges and expenses; and
• Freight and insurance premium required at the port of enty.

In most cases the figure or amount in the sales invoice already covers the above costs. When it does not, the BOC will add the above costs to the amount appearing on the sales invoice.

There are three ways the BOC can verify the export value of an imported item in case of reasonable doubt

• The export value of the goods in the principal export markets of the country of manufacture, if it is not the exporting country;
• The export value of the goods when exported to a third country with the same economy as the country of exportation;
• The domestic wholesale selling price of the same articles in Manila, or other principal markets in the Philippines.

Yes, an importer who is not satisfied with BOC's published export value has 15 days, from the date of the publication, to file a protest.

The BOC has 15 days, from the time of the protest, to decide whether to amend or retain the export value. Modifications will also be published by BOC.