25/08/2026
Are royalty payments part of dutiable value of imported goods?
๐ ๐จ๐๐ง๐-๐ ๐๐๐๐๐ข๐ก ๐ฅ๐ข๐ฌ๐๐๐ง๐ฌ ๐๐ฅ๐จ๐ง๐๐ ๐ง๐๐ซ ๐ง๐ฅ๐๐ฃ
๐๐ฐ๐บ๐ข๐ญ๐ต๐บ ๐ฑ๐ข๐บ๐ฎ๐ฆ๐ฏ๐ต๐ด ๐ง๐ฐ๐ณ๐ฎ ๐ฑ๐ข๐ณ๐ต ๐ฐ๐ง ๐ต๐ฉ๐ฆ ๐ฅ๐ถ๐ต๐ช๐ข๐ฃ๐ญ๐ฆ ๐ท๐ข๐ญ๐ถ๐ฆ ๐ถ๐ฏ๐ฅ๐ฆ๐ณ ๐๐ฆ๐ค๐ต๐ช๐ฐ๐ฏ 201(๐)(1)(๐ฆ) ๐ฐ๐ง ๐ต๐ฉ๐ฆ ๐๐๐๐ (๐ข๐ญ๐ช๐จ๐ฏ๐ฆ๐ฅ ๐ธ๐ช๐ต๐ฉ ๐๐ณ๐ต๐ช๐ค๐ญ๐ฆ 8(1)(๐ค) ๐ฐ๐ง ๐ต๐ฉ๐ฆ ๐๐๐ ๐๐ข๐ญ๐ถ๐ข๐ต๐ช๐ฐ๐ฏ ๐๐จ๐ณ๐ฆ๐ฆ๐ฎ๐ฆ๐ฏ๐ต) ๐น๐น๐น
๐๐ฅ๐ฅ๐ช๐ต๐ช๐ฐ๐ฏ๐ด ๐ต๐ฐ ๐ต๐ข๐น ๐ข๐ฏ๐ฅ ๐ฅ๐ฆ๐ง๐ช๐ค๐ช๐ฆ๐ฏ๐ค๐บ ๐ช๐ฏ๐ต๐ฆ๐ณ๐ฆ๐ด๐ต ๐ถ๐ฏ๐ฅ๐ฆ๐ณ ๐๐ฆ๐ค๐ต๐ช๐ฐ๐ฏ 249(๐) ๐ณ๐ฆ๐ข๐ฅ ๐ต๐ฐ๐จ๐ฆ๐ต๐ฉ๐ฆ๐ณ ๐ธ๐ช๐ต๐ฉ ๐๐ฆ๐ค๐ต๐ช๐ฐ๐ฏ 247(๐ข) ๐ข๐ฑ๐ฑ๐ญ๐บ ๐ข๐ค๐ณ๐ฐ๐ด๐ด ๐ข๐ญ๐ญ ๐ช๐ฏ๐ต๐ฆ๐ณ๐ฏ๐ข๐ญ ๐ณ๐ฆ๐ท๐ฆ๐ฏ๐ถ๐ฆ ๐ต๐ข๐น๐ฆ๐ด ๐ช๐ฎ๐ฑ๐ฐ๐ด๐ฆ๐ฅ ๐ถ๐ฏ๐ฅ๐ฆ๐ณ ๐ต๐ฉ๐ฆ ๐๐ข๐น ๐๐ฐ๐ฅ๐ฆ, ๐ช๐ฏ๐ค๐ญ๐ถ๐ฅ๐ช๐ฏ๐จ ๐๐๐, ๐ข๐ฏ๐ฅ ๐ข๐ณ๐ฆ ๐ฏ๐ฐ๐ต ๐ด๐ต๐ณ๐ช๐ค๐ต๐ญ๐บ ๐ญ๐ช๐ฎ๐ช๐ต๐ฆ๐ฅ ๐ต๐ฐ ๐ช๐ฏ๐ค๐ฐ๐ฎ๐ฆ, ๐ฆ๐ด๐ต๐ข๐ต๐ฆ, ๐ข๐ฏ๐ฅ ๐ฅ๐ฐ๐ฏ๐ฐ๐ณ'๐ด ๐ต๐ข๐น๐ฆ๐ด.
๐๐ข๐๐๐๐ง๐-๐ฃ๐๐๐ ๐ข๐๐๐ฉ๐ ๐ฃ๐๐๐๐๐ฃ๐ฃ๐๐ก๐๐ฆ, ๐๐ก๐ ๐๐. ๐๐ข๐ ๐ ๐๐ฆ๐ฆ๐๐ข๐ก๐๐ฅ ๐๐จ๐ฆ๐ง๐ข๐ ๐ฆ
๐.๐ฅ. ๐ก๐ผ. ๐ฎ๐ฐ๐ฌ๐ฎ๐ฒ๐ฏ-๐ฒ๐ฐ, ๐๐ฝ๐ฟ๐ถ๐น ๐ฏ๐ฌ, ๐ฎ๐ฌ๐ฎ๐ฒ
๐
๐๐๐๐:
The Commissioner of Customs (COC) assessed Colgate-Palmolive Philippines, Inc. (CPPI) for deficiency customs duties and VAT on royalty fees paid to its parent company (CPC), as well as deficiency VAT on arrastre and wharfage fees.
CPPI argued that royalties were paid solely for the right to use intellectual property in the Philippines (not as a condition of importation), that arrastre/wharfage fees are not "other charges" under Section 107 of the NIRC, and that deficiency interest under Section 249(B) cannot apply to VAT.
๐๐๐๐๐/๐:
Are royalty payments made to a foreign licensor part of the dutiable value of imported goods?
Are arrastre and wharfage fees subject to VAT under Section 107 of the NIRC as "other charges"?
Does deficiency interest under Section 249(B) of the NIRC apply to Value-Added Tax (VAT)?
VAT TAX https://s.shopee.ph/80C7FGmBMm
๐๐๐๐๐๐:
Yes. Royalty payments form part of the dutiable transaction value if they satisfy the three-pronged test: relationship test, payment test, and condition test (i.e., failure to pay royalties allows termination of the licensing agreement, making payment inseparable from the sale/importation).
Yes. Following verba legis, arrastre and wharfage charges are necessary costs to release imported goods from customs custody, making them part of "other charges" under Section 107(A).
Yes. Section 247(a) in relation to Section 249 demonstrates legislative intent that interest applies to all internal revenue taxes imposed in the NIRC, including VAT.
๐ผ๐พ๐พ๐๐๐ฟ๐๐๐๐๐, ๐พ๐ค๐ก๐๐๐ฉ๐-๐๐๐ก๐ข๐ค๐ก๐๐ซ๐ ๐๐๐๐ก๐๐ฅ๐ฅ๐๐ฃ๐๐จ, ๐๐ฃ๐.'๐จ ๐๐๐ฉ๐๐ฉ๐๐ค๐ฃ ๐๐ค๐ง ๐๐๐ซ๐๐๐ฌ ๐ค๐ฃ ๐พ๐๐ง๐ฉ๐๐ค๐ง๐๐ง๐ ๐๐จ ๐ฟ๐๐๐๐๐ฟ. ๐๐๐ ๐ฟ๐๐๐๐จ๐๐ค๐ฃ, ๐๐๐ฉ๐๐ ๐
๐๐ฃ๐ช๐๐ง๐ฎ 4, 2018 ๐๐ฃ๐ ๐ฉ๐๐ ๐๐๐จ๐ค๐ก๐ช๐ฉ๐๐ค๐ฃ, ๐๐๐ฉ๐๐ ๐
๐ช๐ฃ๐ 4, 2018 ๐ค๐ ๐ฉ๐๐ ๐พ๐ค๐ช๐ง๐ฉ ๐ค๐ ๐๐๐ญ ๐ผ๐ฅ๐ฅ๐๐๐ก๐จ ๐๐ฃ ๐ฝ๐๐ฃ๐, ๐๐ฃ ๐พ๐๐ผ ๐๐ฝ ๐พ๐๐จ๐ ๐๐ค๐จ. 1471 ๐๐ฃ๐ 1475 ๐๐ง๐ ๐ผ๐๐๐๐๐๐๐ฟ ๐๐๐๐ ๐๐๐ฟ๐๐๐๐พ๐ผ๐๐๐๐. ๐ญ๐ญ๐ญ
FULL:
https://sc.judiciary.gov.ph/wp-content/uploads/2026/08/260811-003-Third-Div-GR-NOS-240263-64-Decision.pdf
๐๐๐๐ฟ ๐ช๐ฉ๐ข๐ค๐จ๐ฉ ๐๐๐ก๐ฅ ๐๐ฃ ๐๐๐ฅ๐ฉ๐๐ข๐๐๐ง?
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