New rule raises tax-free cap for balikbayan boxes

Starting today, returning residents and overseas Filipino workers ( OFWs) can avail themselves of up to P350,000 in duty and tax exemptions for personal and household effects, the Bureau of Customs (BOC) said.

The new ruling on taxand duty-exempt importation of personal and household effects for returning residents and OFWs is contained in the BOC’s Customs Administrative Order 6, which covers the implementing rules and regulations of Republic Act 10863 or the Customs Modernization and Tariff Act.

Under the new rule, only returning residents – who are defined as Filipino nationals including spouse and dependent children, who stayed abroad for at least six months – can avail themselves of the tax- and duty-free exempt policy.

The returnees and OFWs are allowed P150,000 worth of personal and household goods free of taxes and duties if they have stayed in a foreign country from six months to less than five years; P250,000 if they stayed abroad for five years but not more than 10 years; and P350,000 if they lived in a foreign country for at least 10 years.

Personal and household effects refer to items like clothes, gadgets, toiletries and household furnishing for personal use and not for commercial purposes. Returning OFWs are also allowed to bring in one home appliance and other valuables not exceeding P150,000 without having to pay tax. All the household appliances, jewelry, precious stones and other luxury goods previously exported from the Philippines are also exempt from taxes for as long as these are covered by a BOC Certificate of Identification before the export.

To avail of this privilege, the packages must be brought by the returning Filipino. If not, it must arrive within six months from the date of their arrival in the Philippines.

They should also submit to the BOC a “personal and household effect declaration form” in advance or upon arrival, and secure a duty- and tax-free exemption certificate from the Revenue Office of the Department of Finance.

Excisable items, such as distilled spirits, wines, cigarettes and perfumes in excess of the allowable quantity are already subject to duties and other charges. Unless covered by a pre-departure Certificate of Identification, the following are not covered by tax exemption: luxury items such as vehicles, watercraft and aircraft; animals; donations; regulated goods; prohibited and restricted goods; goods intended for commercial purposes; and goods in commercial quantity.

Last Dec. 25, the BOC implemented CAO 5, which allowed OFWs to send home balikbayan boxes without having to pay duties and taxes.