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Monday, January 4, 2016

Books and Taxes

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gov.ph

ARE IMPORTED BOOKS TAXED?

No. Books are tax-free and VAT-exempt by virtue of the Florence Agreement. The agreement covers a wide range of materials such as printed books–making no distinctionwhether these books are fiction, graphic novels, or comic books.
The Department of Finance clarified their procedures and exempted books for “personal use” from any extensive documentary requirements. But noted that such importations “should be cleared and released through the required declaration of goods as provided under existing rules and regulations.”

Commercial book importers on the other hand must seek an exemption from the Mabuhay Lane of the Department of Finance, [READ: How to apply for book import duty exemption] certifying that products to be imported fall within those granted tax and duty exemptions by the Florence Agreement.
While books are tax and duty-free, the Post Office and Customs charges fees for several services. [Jump to: What are the usual Customs and Postal fees that I have to pay for?]

WHAT IS THE FLORENCE AGREEMENT?

The Agreement on the Importation of Educational, Scientific and Cultural Materials—also known as the Florence Agreement, of which the Philippines has been a signatory since August 2, 1952—stipulates that no Customs duties or any other charges, including value added tax (VAT), be applied to imported educational, scientific, and cultural materials.
The agreement covers books, publications, and documents (Annex A)—including music sheets, maps, and charts; works of art and collector’s pieces (Annex B); and visual and auditory material (Annex C); scientific instruments or apparatus (Annex D); articles for the blind (Annex E). The one exception concerns publications that are essentially for advertising purposes.
The annexes are an integral part of the Florence Agreement. View the annexes below:
Annex A: Books, publications and documents Annex B: Works of art Annex C: Visual and auditory materialsAnnex D: Scientific instruments or apparatus

Annex E: Articles for the blind 
 
Printed books.
Newspapers and periodicals.
Books and documents produced by duplicating processes other than printing.
Official government publications, that is, official, parliamentary and administrative documents published in their country of origin.
Travel posters and travel literature (pamphlets, guides, time-tables, leaflets and similar publications), whether illustrated or not, including those published by private commercial enterprises, whose purpose is to stimulate travel outside the country of importation.
Publications whose purpose is to stimulate study outside the country of importation.
Manuscripts, including typescripts.
Catalogues of books and publications, being books and publications offered for sale by publishers or booksellers established outside the country of importation.
Catalogues of films, recordings or other visual and auditory material of an educational, scientific or cultural character, being catalogues issued by or on behalf of the United Nations or any of its Specialized Agencies.
Music in manuscript or printed form, or reproduced by duplicating processes other than printing.
Geographical, hydrographical or astronomical maps and charts.
Architectural, industrial or engineering plans- and designs, and reproductions thereof, intended for study in scientific establishments or educational institutions approved by the competent authorities of the importing country for the purpose of duty-free admission of these types of articles.
 
Paintings and drawings, including copies, executed entirely by hand, but excluding manufactured decorated wares.
Hand-printed impressions, produced from hand-engraved or hand-etched blocks, plates or other material, and signed and numbered by the artist.
Original works of art of statuary or sculpture, whether in the round, in relief, or in intaglio, excluding mass-produced reproductions and works of conventional craftsmanship of a commercial character.
Collectors’ pieces and objects of art consigned to public galleries, museums and other public institutions, approved by the competent authorities of the importing country for the purpose of duty-free entry of these types of articles, not intended for resale.
Collections and collectors’ pieces in such scientific fields as anatomy, zoology, botany, mineralogy, paleontology, archaeology and ethnography, not intended for resale.
Antiques, being articles in excess of 100 years of age.

 
Films, filmstrips, microfilms and slides, of an educational, scientific or cultural character, when imported by organizations (including, at the discretion of the importing country, broadcasting organizations), approved by the competent authorities of the importing country for the purpose of duty-free admission of these types of articles, exclusively for exhibition by these organizations or by other public or private educational, scientific or cultural institutions or societies approved by the aforesaid authorities.
Newsreels (with or without sound track), depicting events of current news value at the time of importation, and imported in either negative form, exposed and developed, or positive form, printed and developed, when imported by organizations (including, at the discretion of the importing country, broadcasting organization) approved by the competent authorities of the importing country for the purpose of duty-free admission of such films, provided that free entry may be limited to two copies of each subject for copying purposes.
Sound recordings of an educational, scientific or cultural character for use exclusively in public or private educational, scientific or cultural institutions or societies (including, at the discretion of the importing country, broadcasting organizations) approved by the competent authorities of the importing country for the purpose of duty-free admission of these types of articles.
Films, filmstrips, microfilms and sound recordings of an educational, scientific or cultural character produced by the United Nations or any of its Specialized Agencies.
Patterns, models and wall charts for use exclusively for demonstrating and teaching purposes in public or private educational, scientific or cultural institutions approved by the competent authorities of the importing country for the purpose of duty-free admission of these types of articles.

 
Scientific instruments or apparatus, intended exclusively for educational purposes or pure scientific research, provided:
a) That such scientific instruments or apparatus are consigned to public or private scientific or educational institutions approved by the competent authorities of the importing country for the purpose of duty-free entry of these types of articles, and used under the control and responsibility of these institutions ;
(b) That instruments or apparatus of equivalent scientific value are not being manufactured in the country of importation.

 
Books, publications and documents of all kinds in raised characters for the blind. Other articles specially designed for the educational, scientific or cultural advancement of the blind, which are imported directly by institutions or organizations concerned with the welfare of the blind, approved by the competent authorities of the importing country for the purpose of duty-free entry of these types of articles.

The exemptions in Annex A are not applicable to the following:
(a) Stationery;
(b) Books, publications and documents (except catalogues, travel posters and travel literature referred to above) published by or for a private commercial enterprise, essentially for advertising purposes;
(c) Newspapers and periodicals in which the advertising matter is in excess of 70 per cent by space;
(d) All other items (except catalogues referred to above) in which the advertising matter is in excess of 25 per cent by space. In the case of travel posters and literature, this percentage shall apply only to private commercial advertising matter.

WHAT IS THE DIFFERENCE BETWEEN BOOKS FOR COMMERCIAL USE AND BOOKS FOR PERSONAL USE?

Books for personal use are books that are imported as personal effects—whether transported as accompanied baggage, delivered through couriers, or delivered through post offices.
Books for personal use must be cleared and released through the required declaration of goods, as provided under existing rules and regulations. No payment of duties or taxes is required, although, if a package is delivered through mail, the local post office may charge a storage or handling fee.
On the other hand, books for commercial use, are those “in excess of what is compatible and commensurate with a person’s normal requirements.” That is: In excess of six copies of any one work for individuals, or anything in excess of 12 copies of any one work for institutions.
Books brought into the country in commercial quantities will only be released by the Bureau of Customs (BoC) once an importer presents an endorsement from the Revenue Office of the Department of Finance. This process will certify that the imported products will be granted tax and duty exemptions under the Florence Agreement.

WHAT ARE THE LIMITS ON IMPORTING BOOKS FOR PERSONAL OR COMMERCIAL USE?

IF YOU ARE IMPORTING BOOKS FOR PERSONAL USE:
An individual importer or recipient of the package can have any number of books, as long as there are no more than 6 copies of any one title.
An institutional importer or recipient of the package can have any number of books, as long as there are no more than 12 copies of any one title.
These books are unconditionally duty- and tax-free.
IF YOU ARE IMPORTING BOOKS FOR COMMERCIAL USE
commercial quantity of imports is considered in excess of an individual’s normal requirements.
commercial importer must first present an endorsement from the Revenue Office of the Department of Finance which shall be issued after the presentation of the following documents:
  1. Bill of Lading/Airway bill/Postal Registry Notice with BOC Tentative Assessment Sheet;
  2. Commercial Invoice;
  3. Packing List with title of books;
  4. Authority of Representative (in lieu of consignee);
  5. Affidavit to the effect that the shipment consists of books;
  6. In case of donated books – Deed of Donation duly authenticated by the Philippine Consulate abroad, and Deed of Acceptance;
  7. Certification from the UNESCO Office in the Philippines attesting that the importation/s is/are covered by the Florence Agreement; and
  8. Certificate of Registration with the National Book Development Board as book importer or publisher.

If the imported books are donated, a deed of donation duly authenticated by the Philippine Consulate abroad and deed of acceptance must be provided. If the consignee has assigned a representative to facilitate the book’s release, an authorization is required.

WHAT ARE THE USUAL CUSTOMS AND POSTAL FEES THAT I HAVE TO PAY FOR?

After getting the appropriate signature from the DOF Mabuhay Lane, the importer, with all the approved documents, should proceed to the postal office to pay the appropriate BOC and Postal Office fees as follows:
Import Processing Fee (IPF)
Value of importationIPF
P100,000 and below
P101,000 to P250,000P250
P251,000 to P500,000P500
P501,000 to P750,000P750
P751,000 and aboveP1000
Customs Documentary Stamp P265
Post Office Parcel Fee P35.00
source: http://www.gov.ph/books-and-taxes/
My Note:  The annexes are an integral part of the Florence Agreement. 
View the annexes. Please click the link above for complete view due to lack of space.

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