Payment of Freight Tax & Application of ICSC

Pursuant to Bureau of Internal Revenue Memorandum Order No. 43-2016 dated July 21, 2016, strictly requiring payment of freight taxes and the presentation of the International Carrier Special Certificate (ICSC) to the Bureau of Customs for all cargo loading in the Philippines prior to the issuance of the departure clearance. Rate of freight taxes due is based on gross freight declaration:

International Carrier Tax = Gross freight x 3.0%

Income Tax on Freight = Gross freight x 2.5%

(1.5% shall apply in the Income Tax on Freight if the vessel’s port of registry is listed as country with Philippine tax treaties.)

For your reference, attached docs as follows:

– BIR Memorandum

– List of Countries with Philippine Tax Treaties

– PH – RA-10173 – DATA PRIVACY LAW

In view of the above, please send us the following requirements:

A. Copy of the fixture note which must bear signature and company’s stamp of both owner & charterer/commercial owner and must contain the following information as required by the BIR :

1. Vessel Owner

2. Vessel Charterer

3. Vessel Name

4. Vessel Particulars

5. Vessel Flag

6. Cargo / Quantity

7. Laydays

8. Loadport / Disport

9. Gross Freight Declaration (lumpsum)

If you have previous loading operations in the Philippines please let us know the port of loading and the name of the agent.

However, if you have not done any loading operations before, with the new guidelines being strictly implemented by Philippine Bureau of Internal Revenue (BIR) in applying for owners Tax Identification Number (TIN) for freight tax payment, the following documents below must be Apostillized by your Foreign Affairs Department;

B. Registered Owners Certificate of Incorporation OR Articles of Incorporation OR Certificate of Registry (with Registered Owners Corporate Registry Number)

C. Secretary Certificate authorizing Local Agent to deal with BIR. (please see attached)

D. Valid ID (preferably Passport) of the Signatory in the Secretary Certificate.