What is the value of a transaction?

Determining the True Value of Imported Goods for EU Customs Valuation

When importing goods into the European Union (EU), the transaction value plays a crucial role in determining the customs duty and other taxes payable. However, simply considering the initial purchase price is insufficient. To ensure accurate valuation, corrections are necessary to account for missing elements, reflecting the true price paid or payable for export into the EU’s customs territory.

Corrections for Missing Elements

The transaction value should include not only the purchase price but also any additional costs incurred before the goods are exported to the EU. These costs may include:

• Transportation and insurance: The cost of transporting the goods from the country of origin to the EU, as well as insurance premiums incurred during transit.
• Commissions and brokerages: Any fees paid to agents or brokers for assisting with the purchase or importation of the goods.
• Packing and packaging: Costs associated with packing the goods for shipment, including materials and labor.
• Royalty and license fees: Any payments made for the use of intellectual property rights related to the goods.
• Assists: Any contributions made by the importer, such as providing materials or labor, which enhance the value of the imported goods.

Exclusions from Transaction Value

Certain costs are excluded from the transaction value, including:

• Import duties and taxes: These are payable separately upon importation.
• Internal costs of the importer: Costs incurred after the goods have been imported, such as storage or warehousing.
• Abnormal discounts: Any discounts that deviate significantly from the usual market price.
• Financial charges: Interest charges or other financial expenses incurred during the financing of the purchase.

Importance of Accurate Valuation

Properly determining the transaction value is essential for several reasons:

• Customs duty calculation: The transaction value forms the basis for calculating customs duty, which is a percentage of the value of the goods.
• Statutory compliance: Incorrect valuation can lead to penalties or fines imposed by customs authorities.
• Competitive pricing: Accurate valuation ensures that importers compete fairly with domestic suppliers.
• Trade facilitation: It simplifies customs clearance procedures and reduces the risk of delays.

In conclusion, determining the value of imported goods destined for the EU requires a comprehensive approach that accounts for all relevant costs. By making the appropriate corrections for missing elements and excluding expenses that are not part of the transaction value, importers can ensure accurate customs valuation, enabling efficient trade while adhering to legal requirements.