Rules for Bringing Product Samples and Medicine Models into the Philippines Duty-Free

Companies often bring items into the country to show them to potential buyers or to test new products. The Philippine government supports this by allowing these samples to enter without the usual heavy taxes. This helps local businesses see what is new in the global market without spending too much money upfront.

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Non-Commercial Samples and Medicine

These are items that have no real value for sale - they might be cut in half, have holes in them, or be small models that do not actually work. Because nobody can sell them, they are duty-free.

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Medicine samples are handled with more care. To get the tax break:

• The package must have "SAMPLE - SALE PUNISHABLE BY LAW" printed clearly on the box (not just a sticker).
• The medicine must be a new type not yet sold in the Philippines.
• The importer must be a registered trader in that field.
• The shipment needs authorization from both the Secretary of Finance and the Secretary of Health.
• The importer can only bring these in once in a small enough amount for testing.

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Commercial Samples

These are items that could actually be sold, so the rules are different:

• The total value must not be more than P50,000.
• The importer must pay a security or deposit equal to the taxes they would normally pay.
• The importer must ship the items back out of the country within three (3) months.
• If they do not ship them back, the government keeps the deposit as payment for the taxes.
• Jewelry and precious stones are never allowed under this rule because they are too hard to track.

If the value is over P50,000, the importer can choose P50,000 worth of goods to be tax-free and pay regular taxes on the rest.

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Required Documents

1. Tax and Duty Exemption Indorsement (TEI) with supporting papers
2. Goods Declaration
3. Bill of Lading or Air Waybill
4. Invoice and Packing List

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Process: Non-Commercial Samples

1. Register the Trade - The importer ensures they are a registered entity engaged in the specific trade of the goods being brought in.
2. Secure Government Permits - Obtain prior authorization from the Secretary of Finance. If the items are new medicines, also secure a certification from the Secretary of Health.
3. Verify Physical Markings - Check that all medicine samples have the required phrase permanently printed on the boxes and that other samples are in a size or quantity that makes them impossible to sell.
4. Lodge the Goods Declaration - File the Goods Declaration along with the TEI, Invoice, and Packing List with the Bureau of Customs.
5. Inspection and Final Release - A Customs officer inspects the items to confirm they are truly non-commercial or models and releases the goods without requiring duty payment.

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Process: Commercial Samples

1. Assess the FCA Value - Calculate the value of the shipment. If it exceeds P50,000, select a specific portion within that limit to enter under this exemption and prepare to pay full taxes on the remaining excess.
2. Post the Security Deposit - Provide a bond or cash to the Bureau of Customs equal to 100% of the duties and taxes that would normally be charged.
3. Submit the Cargo Documents - Submit the Bill of Lading, Air Waybill, and Invoice alongside the Goods Declaration to start the clearance process.
4. Identify the Goods - Assist the Customs examiner in verifying that the goods are readily identifiable and do not include restricted items like precious stones or jewelry.
5. Track the Re-export Deadline - The samples must be shipped back out of the Philippines within three (3) months from the date the Bureau accepted the Goods Declaration.
6. Cancel the Security or Pay Duties - Once the goods are exported, show proof of shipment to get the security deposit back. If the goods are not exported on time, the Bureau forfeits the security to cover the unpaid duties and taxes.