Reference: Taxes for Importers

Taxes for Importers

I am the owner of a food manufacturing facility and we’re currently thinking of importing raw materials instead of sourcing them locally. Do I need to apply as an importer with the Bureau of Internal Revenue (BIR)? What are the taxes that I will have to pay?

To become an importer, taxpayers need to have an Importer's Clearance Certificate. However, this application no longer needs to pass through the BIR. Previously, the application was a two-part process – first with the BIR, then with the Bureau of Customs (BOC).

Under the Department of Finance's Department Order No. 11-2018, the BOC will have the sole authority to accredit customs brokers and importers.

Imported goods are subject to tariffs, but this amount will differ based on the source of the imported goods. For revenue taxes, imported goods are subjected to an additional 12% value-added tax (VAT). The VAT will be based on the total value to be determined by the BOC.

Am I liable to pay the VAT on imported goods even if I am earning below the threshold? What are the other VAT exemptions?

The VAT threshold of P3 million only exempts the sale or lease of goods or the performance of services. In other words, even if the taxpayer has annual gross sales of below P3 million, they are still liable to pay the 12% VAT on imported goods.

But there are still exemptions from the VAT on imported goods.

However, it should be noted that importers are required to use the BIR's Electronic Filing and Payment System (eFPS) under Revenue Regulation No. 10-2014. Failure to use the eFPS platform will render the importer a priority target for BIR audits, as stated by Revenue Memorandum Order No. 19-2015.