Friday, May 5, 2017

No taxes on balikbayan boxes

It is a given fact that Filipinos are everywhere and can be found in almost every nook of this globe. Based on a 2015 survey on overseas Filipinos, there are 2.4 million Overseas Filipino Workers (OFWs) in the world. These Filipinos, one way or another, find ways to send cash or gifts to their loved ones.

By virtue of Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act (CMTA), in relation to Customs Administrative Order (CAO) No. 5-2016, Balikbayan Boxes sent by Qualified Filipinos While Abroad (QFWA) are no longer subject to duties and taxes. QFWA is a collective term used to refer to non-resident Filipinos, OFWs, and resident Filipinos. The CAO covers exemption from duties and taxes of consolidated shipments of Balikbayan Boxes sent through any port of entry by QFWA to families or relatives in the Philippines.

For purposes of the exemption, a Balikbayan Box refers to a corrugated box or other container up to a maximum volume of 200,000 gross cubic centimeters, often transported by freight forwarders either by sea or air. It shall only contain personal and household effects and shall neither be in commercial quantities nor intended for barter, sale or for hire. Thus, sole proprietorships and juridical entities are not qualified to avail of the benefits.