- Agricultural and marine food products in their original state;
- Livestock and poultry yielding foods for human consumption;
- Breeding stock and genetic materials;
Polished and/or husked rice, corn grits, raw cane sugar and molasses, ordinary salt and copra are agricultural food products in their original state.
Marine food products shall include fish and crustaceans, such as, but not limited to, eels, trout, lobster, shrimps, prawns, oysters, mussels and clams.
Livestock shall include cows, bulls and calves, pigs, sheep, goats and rabbits. Poultry shall include fowls, ducks, geese and turkey. Livestock or poultry does not include fighting cocks, race horses, zoo animals and other animals generally considered as pets.
Meat, fruit, fish, vegetables and other agricultural and marine food products shall be considered in their original state even if they have undergone the simple processes of preparation or preservation for the market, such as drying, roasting, broiling, freezing, salting, smoking or stripping.
- Fertilizers, seeds, seedling and fingerlings;
- Fish, prawn, livestock and poultry feeds, including ingredients used in the manufacture of finished feeds (except specialty/non-agricultural feeds or foods for race horses, fighting cocks, aquarium fish, zoo animals and other animals generally considered as pets);
- Personal and household effects belonging to residents of the Phil. returning from abroad and non-resident citizens coming to resettle in the Phil., provided such goods are exempt from customs duties;
- Professional instruments and implements, wearing apparel, domestic animals, and personal household effects (except vehicle, vessel, aircraft, machinery and other goods for use in the manufacture and merchandise of any kind in commercial quantity) belonging to persons coming to settle in the Phil., for their own use and not for sale, accompanying such persons or arriving within 90 days before or after their arrival, upon production of evidence that such persons are actually coming to settle in the Phil. and that the change of residence is bonafide;
- Direct farm inputs, machineries and equipment, including spare parts, to be used directly and exclusively in the production and/or processing of their produce by agricultural cooperatives duly registered and in good standing with the CDA;
- Books and any newspaper, magazine, review, or bulletin which appears at regular intervals with fixed prices for subscription and sale and not devoted principally to the publication of paid advertisements;
- Passenger or cargo vessels and aircraft, including engine, equipment and spare parts for domestic or international transport operations; provided that the passenger and/or cargo vessels, shall be limited to those of 150 tons and above, including engine and spare parts of said vessels; provided, further, that the vessels shall comply with the age limit requirement, at the time of acquisition counted from the date of the vessel’s original commissioning, as follows:
- Passenger and/or cargo vessels, the age limit is 15 years old.
- Tankers, the age limit is 10 years old.
- High-speed passenger crafts, the age limit is 5 years old.
- Fuel, goods and supplies for international shipping or air transport operations; provided that said fuel, goods and supplies shall be used exclusively to the transport of goods and/or passengers from a port in the Phil. directly to a foreign port without stopping at any port in the Phil.;
Questions to ponder:
- Which statement is wrong? Value-added tax on importation of goods:
A. Is imposed on an importation for sale or for use in business.
B. Is imposed on an importation for personal use.
C. Should be paid prior to removal from customs custody.
D. Is not available as input tax even if related to business.
2. One of the following statements is incorrect.
A. Imported goods which are subject to excise tax are no longer subject to value-added tax.
B. VAT on the importation is paid to the Bureau of Customs before the imported goods are released from its custody.
C. Expenses incurred after the goods are released from customs custody are disregarded in computing VAT on importation.
D. When a person who enjoys tax-exemption on his importation subsequently sells in the Philippines such imported articles to non-exempt person, the purchaser-non-exempt person shall pay the VAT on such importation.
For the correct answers, I would like to invite you to join my exclusive groups of aspiring CPAs for my upcoming project “CPA Dream Academy”.CPA DREAM ACADEMY
JONATHAN RUIZ CPA, MIB