MTF Counsel | Tax Lawyer Philippines | Best Law Firms in the Philippines

taxation in the philippines

tax lawyer philippines

law firms in makati

lawyers in the philippines

best lawyers in the philippines

special power of attorney philippines
taxation law
customs lawyer Philippines
corporate lawyer philippines
commercial lawyer philippines
tax law expert philippines
customs law expert philippines
commercial law expert philippines
corporate law expert philippines








By: Mark Anthony P. Tamayo on December 27, 2018

The annual yuletide festival is certainly the most joyous time of the year. Not only do we celebrate the birth of our Lord but it is also the time to reconnect with friends, acquaintances and most specially, family and relatives. It is traditionally a season of gift giving, remembering dearly people close to our hearts.

Unfortunately, for our relatives staying abroad, the means to celebrate the yuletide season with loved ones will be through a warm and heartfelt phone or video call coupled perhaps with posts through social media.

Balikbayan boxes (literally “repatriate boxes”) containing their “pasalubongs or padala” are normally sent, through freight forwarders either by sea or air, to their families and relatives in the Philippines to make the season even merrier. They contain goods the sender thinks the recipient would like, regardless of whether these goods can be bought inexpensively in the Philippines.

Rules on balikbayan boxes

The Customs Modernization and Tariff Act (CMTA) and the Tax Reform Acceleration and Inclusion (TRAIN ) law exempt the importation of balikbayan boxes containing personal and household effects from the payment of customs duty and taxes. The threshold value of such importation should, however, not exceed a total Free Carrier (FCA) value of P150,000 in any calendar year. Any amount in excess shall be subject to the applicable duties and taxes.

Customs Memorandum Order (CMO) No. 18-2018 (issued last October 2018) implements Customs Administrative Order (CAO) No. 1-2018 (issued last August 2018) and provides the guidelines relating to the consolidated shipment of balikbayan boxes.

Under CAO 01-2018, only qualified Filipinos while abroad (qualified Filipinos or sender) are allowed to send to their families or relatives (i.e., relatives up to the fourth civil degree of consanguinity or affinity) in the Philippines balikbayan boxes containing personal and household effects.

Qualified Filipinos include non-resident Filipinos (i.e., those who have established permanent residency abroad but have retained Filipino citizenship), Overseas Filipino Workers (OFWs) and resident Filipinos (i.e., Filipinos who temporarily stay abroad holding student, investor, tourist and similar visas).

For purposes of duty and tax exemption, the balikbayan box should contain only “personal and household effects” that shall neither be in commercial quantities nor intended for barter, sale or for hire. The term “commercial quantity” has been the subject of diverse interpretations but would generally refer to the quantity for a given kind or class of articles which are in excess of what is compatible with and commensurate to the person’s normal requirements for personal use.

For a single sender with multiple ultimate consignees, commercial quantity of a given class shall be determined based on the total quantity sent by the sender to all consignees.

“Personal effects” include new or used articles for personal use or consumption, such as wearing apparels, personal adornments, electronic gadgets, toys, toiletries or similar items. It does not include motor vehicles.

“Household effects”, on the other hand, include furniture, dishes, linens and similar household furnishings for personal or family use. Regulated personal and household effects can also be sent provided they are not in commercial quantity.

The privilege of importing the above items on a duty and tax-exempt basis may be availed of up to three times in a calendar year (period from Jan. 1 to Dec. 31 of the same year) and this applies whether the baggage is accompanied or unaccompanied by the sender.

The exemption will not apply if the total availments exceeded three times in a year even if the aggregate value did not exceed the threshold amount of P150,000.
De minimis shipment (value of which is less than P10,000) is not considered as one availment as it is considered a small value importation for which no duty and taxes are imposable.

Procedural requirements

Under CAO 01-2018, the sender has to prepare and submit to the Consolidator (Foreign-registered forwarder) an information sheet (providing detailed information on the sender, the recipient and contents of the balikbayan box) that will serve as the packing list of the balikbayan box. Under CMO 18-2018, the sender may request copies of the information sheet from the consolidator or download it directly from the Bureau of Customs (BOC) website ( or from websites of BOC-accredited value-added services providers (VASPSs).

In addition, certain identification documents (such as, among others, copy of the passport, overseas employment certificate and work permit) and invoices or receipts, if available, are required to be submitted to the consolidator.

The information sheet together with all supporting documents shall then be transmitted by the consolidator to the deconsolidator (consolidator’s agent in the Philippines) before the arrival of the goods in the Philippines who shall then submit them to the BOC.

Based on the information and documents, the BOC customs operations officer shall determine if a sender is qualified to, among others, avail of the duty and tax exemption as well as conduct the expedited clearance of balikbayan boxes.

Under CMO 18-2018, consolidated balikbayan shipments will undergo mandatory non-intrusive inspection by the BOC. Shipments declared as consolidated balikbayan boxes but found to be otherwise will be considered misdeclared and subject to seizure and forfeiture proceedings.

The sending of a balikbayan box has a deep and profound meaning for Filipinos. It is an extension of the sender and symbolizes love and thoughtfulness. In a way, it is a consolation for the sender’s absence in the Philippines. Being compliant with the rules results to a hassle-free shipment for our dear ones.

On behalf of MTF, we wish everyone a season of great joy and blessings.

(Mark Anthony P. Tamayo is a CPA-Lawyer and a Partner of Mata-Perez, Tamayo & Francisco (MTF) Counsel. His areas of practice are, among others, corporate, tax, international trade & customs.) This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. If you have any question or comment regarding this article, you may email the author at or visit MTF website at

From The Manila Times website on December 27, 2018

Balikbayan boxes for the yule season

Contact Information

Our office address:

15/f Unit A. ACT Tower, H.V. Dela Costa St.
Salcedo Village, Makati City 1227 Philippines

Telefax: +632 831-1297

Telephone: +632 808-5375 • +632 815-0069



Euney Marie J. Mata-Perez

Mark Anthony P. Tamayo

Gerardo Maximo V. Francisco