The Court of Justice of the European Union (CJEU) issued a judgment providing some clarity about the impact of retroactive transfer pricing adjustments on the customs valuation of goods imported into the European Union.
The case is: Hamamatsu Photonics Deutschland (C-529/16, 20 December 2017)
The CJEU found that if the initial transfer price could be subject to retroactive adjustments, it cannot be used for customs valuation purposes. As a result, the customs valuation of goods imported by companies applying a transfer price that allows for retroactive adjustments cannot be based on the transaction value method. Accordingly, one of the other customs valuation methods must be used. However, these methods are widely considered to be much more cumbersome in their practical application. The CJEU judgment could thus have far-reaching consequences for EU importers. Still, the practical implications of the CJEU judgment will likely vary significantly for each EU Member State.
Read a January 2018 report prepared by the KPMG member firm in the Netherlands
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