Customs Valuation - What is it worth?

For almost all goods, customs duty is payable at the point of import based on the transaction value of those goods.  For most importers, this means the invoice price, as evidenced by the commercial invoice from the supplier.  However, what many importers don’t realise is that the invoice price can often include a number of non-dutiable elements, which results in many businesses overpaying customs duty without realising, for example:

• buying commissions
• post import construction charges
• certain financing charges
• in some cases, royalty payments

Equally important is the potential exposure faced by importers who underpay customs duty by inadvertently failing to include in the customs value dutiable elements such as:

• assists
• design work
• certain royalty payments
• insurance
• commissions other than buying commissions

With care, we can help clients to work with their suppliers to dismantle and then reconstruct their invoices in such a way that clearly identifies non-dutiable elements, thus eliminating them from the customs value.  As more than 80% of international trade is between related parties, this type of strategy should be one of the first considerations when looking to reduce customs duty costs.

A review by our customs consultants of your customs valuation and in some cases, transfer pricing policies can often result in opportunities to reduce the customs duty payable at import.

Book your customs valuation consultation now

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