PRORATION
divide/pro rata charges
EXAMPLES 1
INVOICE:
20,000 bags of rice $22,000
15,000 bags of flour $18,000
Total $40000 FOB Port of Calcutta
FRT $2,000
INS $1,900
$43,900 CIF SH
approach 1 – PERCENTAGE(%)
Compute for the FRT corresponding to rice
Formula: FOB OF RICE / [Link] x [Link]
$30,000
/ $48,000
= .625
x $6,400
= $4,000
approach 1 – PERCENTAGE(%)
Compute for the FRT corresponding to flour
Formula: FOB OF FLOUR/ [Link] x [Link]
$18,000
$48,000
= .375
x $6,400
= $2,400
EXAMPLES 2
INVOICE:
18,000 bags of rice $22,000
25,000 bags of flour $26,000
Total $48,000 FOB Port of Calcutta
FRT $5,800
INS $2,600
$56,400 CIF SH
approach 2 – FRACTION & CROSS MULTIPLY
Compute for the FRT corresponding to rice
Formula: FOB OF RICE 1
[Link] X [Link]
$22,000 1
= $48,000 X $5,800
= $127600000
$48,000
= $2,658.33
approach 2 – FRACTION & CROSS MULTIPLY
Compute for the FRT corresponding to flour
Formula: FOB OF FLOUR 1
[Link] X [Link]
$26,000 1
= $48,000 X $5,800
= $150,800,000
$48,000
= $3,141.67
EXAMPLES 3
INVOICE:
25,000 bags of rice $32,000
18,000 bags of flour $18,000
Total $50,000 FOB Port of Calcutta
FRT $4,000
INS $1,600
$55,600 CIF SH
Compute the compound value of FRT & INS corresponding to rice
Formula: FOB OF RICE / [Link] x [Link] VALUE OF FRT & INS
$32,000
X $5,600
$50,000
= .64 x $5,600
= $3,584
Compute the compound value of FRT & INS corresponding to flour
Formula: FOB OF FLOUR/ [Link] x [Link] VALUE OF FRT & INS
$18,000
X $5,600
$50,000
= .36 x $5,600
= $2,016
PRORATION
ON
VAT COMPUTATION
COMPONENTS OF LANDED COST (VAT BASE)
DV (CV + INS +FRT x ER)
CUD (DV x RD)
BC (DV x .00125)
BF (DV x .00125 + 5050)
AC (CMO 7-2014 / CMO 26-95C)
WD (CMO 7-2014 / CMO 26-95C)
CDS (P130 fixed)
IPC (CAO 2-2024)
= LANDED COST
X 12%
= VAT
EXAMPLE
SHIPMENT OF 1x40’ CTN:
200 units of Brand A $12,000
150 unit of Brand B $14,000
TOTAL $26,000 CIF MANILA
● ER – P51/$1
● RD – 12% for X and 8% for Y.
● Both product are classified as general cargo
COMPUTE:
1. 12% VAT of product X and Y
2. Summary of total amount to be paid to BOC by the importer
DV = ($12,000)(51) and ($14,00)(51) A= PHP 612,000
B= PHP 714,00 [Link] =PHP 1,326,000
CUD = (612,000)(12%) and (714,000)(8%) A= PHP 73,440
[Link] =PHP 130,560
B= PHP 57,120
BC = PHP 0
BF = (1,326,000)(.00125) + 5050 PHP 6,707.5
AC PHP 8551
WD PHP 779.05
CDS PHP 130
IPC PHP 2,000
TOTAL TO BE PRORATED = PHP 18,167.55
TOTAL TO BE PRORATED = PHP 18,167.55
● PRODUCT A
PRORATED SHARE OF: ○ $12,000 / $26,000 = 0.461538
● PRODUCT B
○ $14,000 / $26,000 = 0.538462
PRODUCT A PRODUCT B
PHP18,167.55 x 0.461538 PHP 18,167.55 x 0.538462
= PHP 8,385.01 = PHP 9,782.54
VAT COMPUTATION FOR PRODUCT A
PRODUCT A
PHP18,167.55 x 0.461538 = PHP 8,385.01
VAT = LC B x 12%
PHP 612,000
PHP 73,440
PHP 8,385.01
= PHP 693,825.01
x 12%
= PHP 83,259.00
DV = ($12,000)(51) and ($14,00)(51) A= PHP 612,000
B= PHP 714,00 [Link] =PHP 1,326,000
CUD = (612,000)(12%) and (714,000)(8%) A= PHP 73,440
[Link] =PHP 130,560
B= PHP 57,120
BC = PHP 0
BF = (1,326,000)(.00125) + 5050 PHP 6,707.5
AC PHP 8551
WD PHP 779.05
CDS PHP 130
IPC PHP 2,000
TOTAL TO BE PRORATED = PHP 18,167.55
VAT COMPUTATION FOR PRODUCT B
PRODUCT B
PHP 18,167.55 x 0.538462 = PHP 9,782.54
VAT = LC B x 12%
PHP 714,000
PHP 57,120
PHP 9,782.54
= PHP 780,902.54
x 12%
= PHP 93,708.30
TOTAL VAT PAYABLE
PRODUCT X PRODUCT Y
PHP 83,259.00 PHP 93,708.30
PHP 176,967.3
SUMMARY
CUD PHP 130,560
VAT PHP 176,967
CDS PHP 130
IPC PHP 2,000
CSF PHP 510
TOTAL = PHP310,167