The draft guidance addresses three topics:
With respect to the “last sale for import” concept, it remains unclear whether transactions between two or more EU based legal entities or persons must be taken into account for customs valuation purposes. Although the draft guideline introduced the concept of “domestic” sale to determine the applicable “sold for export” transaction in a bonded warehouse, the concept also seems to suggest that a “domestic” sale never qualifies as a transaction within the meaning of Article 70 of the Union Customs Code (UCC), and as such, is not to be taken into account.
The “domestic sale” concept is neither defined nor explained in the draft guidance. As such, many different interpretations of this concept exist. It is therefore likely that a revised draft guidance could be circulated shortly.
The draft guidance with respect to transactions occurring in a bonded facility appear to provide the necessary clarity for economic operators. The measures only apply to a sale of goods in a bonded facility or other “suspensive arrangement” in the absence of a sale related to the same goods that covered the goods on arrival into the EU.
The guidelines do not provide a clear view on the transaction that needs to be used for valuation purposes if multiple transaction occur in a bonded facility. For example, up until now, the position of the Dutch customs administration has been that any such sale may be used, provided that the relevant documents can be provided and that the transaction can be audited by the authorities.
With regard to the new royalty provision, the draft guidelines seem to provide some relief for importers because of a clear reference made to commentary of the World Customs Organization (WCO). The WCO commentary provides a set of criteria to be used in order to determine whether a royalty payment must be considered a “buying condition” and as such is dutiable. It regards the following factors:
Even though this set of conditions seems to be rigid and strict, professional believe that the criteria could be useful in arguing that, not by definition, all royalty payments must be included in the customs value of the imported merchandise.
Read an April 2016 report prepared by the KPMG member firm in the Netherlands: Customs valuation
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