WTO: Agreement on transfer pricing, customs valuation | KPMG | GLOBAL

WCO: Agreement on transfer pricing, customs valuation

WCO: Agreement on transfer pricing, customs valuation

The World Customs Organization this week announced the finalization of a new agreement on transfer pricing and customs valuation. The action was finalized by the WCO’s technical committee on customs valuation, and the WCO “instrument” contains a case study illustrating a scenario under which customs authorities took into account transfer pricing information in the course of verifying the customs value.


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As noted in the WCO release, the valuation agreement sets out the methodology for establishing the customs value, used as the basis for calculating customs duties. The agreement foresees that customs authorities may examine transactions between related parties when they have doubts that the price has been influenced by the relationship. 

Over recent years, the similar objectives but different methodologies of transfer pricing and customs valuation have been noted, and it has been recognised that business documentation developed for transfer pricing purposes may contain useful information for customs. The new case study provides an example of customs making use of transfer pricing information based on the transactional net margin method (TNMM). On the basis of this information, customs accepted that the sale price in question had not been influenced by the relationship.

Closer cooperation between customs and tax administrations is advocated, in order to strengthen governments’ ability to identify the correct tax and duties legally due and enhance trade facilitation for the compliant business sector.


For more information, contact a professional with KPMG’s Trade & Customs practice:

Douglas Zuvich | +1 (312) 665-1022 | dzuvich@kpmg.com

Andrew Siciliano | +1 (631) 425-6057 | asiciliano@kpmg.com

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