Customs Manual on Valuation - [Valuation Manual]

1 Tax and Duty Manual Customs Manual on Valuation Customs Manual On Valuation This document was last reviewed May 2019. This Manual provides a guide to the interpretation of the law governing Valuation for Customs Purposes which is set out in Commission Delegated Regulation (EU) No. 2015/2446 and Commission Implementing Regulation No. 2015/2447 laying down the detailed rules and implementing provisions of Regulation (EU) No 952/2013 of the European Parliament and Council establishing the Union Customs Code, and it should be read in conjunction with these regulations. For queries contact Origins and Valuation Unit. The information in this document is provided as a guide only and is not professional advice, including legal advice.

2 It should not be assumed that the guidance is comprehensive or that it provides a definitive answer in every case. 1. Tax and Duty Manual Customs Manual on Valuation Table of Contents 1 Introduction ..5. What is Customs Valuation ?..5. Why is a Customs value Where is the legislation covering Customs Valuation ? ..5. Where are the different duty types set out for goods?..5. Is the Customs value used for any other purpose?..5. How is the Customs value calculated? ..6. Is documentary evidence of Valuation required? ..6. 2 Valuation Methods of Valuation ..6. How to Use the Valuation Methods ..7. 3 Method 1 Transaction Value Method ..7. What is the Transaction Value?

3 7. What is the price paid? ..8. What if Customs query the amount of the Customs value declared?..8. Definition of Related ?..8. Relationship Not Necessarily Decisive?..9. Acceptance of the Transaction Value ..9. What must be added to the price actually paid or Are there any deductions allowable from the Customs value? ..11. Customs Clearance Time Tolerance ..13. 4 Other Methods of Valuation ..13. Consideration of the Other Valuation Methods ..13. Method 2 Identical Goods Method 3 Similar Goods Method ..14. Method 4 Deductive Method ..15. Method 5 Computed Method 6 Residual Valuation 5 Simplified Procedure System (SPV) for the Customs Valuation of Certain Fruit and What are SPVs.

4 17. What fruit and vegetables are coved by Notification of current SPVs to the regions and Should declared weights of goods covered by SPVs be checked?..18. Damaged Goods or Goods Unfit for Human Consumption ..18. Notification of significant price variations..18. 6 Valuing free of charge goods ..18. Valuing free of charge replacement 7 Valuing rented or leased goods ..19. 8 Goods lost, damaged or defective ..19. 2. Tax and Duty Manual Customs Manual on Valuation Evidence of loss, damage or defective goods..19. How is the revised Customs value calculated? ..19. What if the goods are found to be defective after importation? ..20. 9 Additional Charges ..20.

5 Transport Air freight charges ..20. Postal Insurance charges..21. Loading and Handling Duties and Taxes Applicable outside the Community ..22. Charges that can be 10 Place of Standard Place of Special Rules Relating to the Place of Introduction ..23. 11 Application of the Valuation rules in specific Combined Purchasing ..24. Private Importations ..24. Hire Second-Hand or Used Articles ..25. Successive Sales ..25. Goods Imported for Sale on Consignment ..25. Goods Imported for Sale by 12 Time for Valuation purposes ..26. 13 Invoices and payments in foreign Establishing the rate of Publication of rates of exchange ..26. Payment made at fixed rate of exchange.

6 27. 14 Valuation rules for specific Customs procedures ..27. 15 Release of goods in advance of final determination on value ..28. 16 Requirement to produce a Valuation declaration..28. Declaration (C&E G563) ..28. General Declaration (C&E G563A) ..28. 17 Exceptions from requirement to produce a Valuation 18 Persons competent to make declarations ..31. 19 Valuation 20 Importance of Valuation ..31. 21 Valuation Orders ..32. What is a Valuation Order ..32. Processing a Valuation order..33. Procedure for issuing a Valuation Order ..33. Use of the Valuation 3. Tax and Duty Manual Customs Manual on Valuation 22 Cases of Doubt or Difficulty ..34. 23 Auditing Customs Value.

7 34. Supporting documents ..35. Control of Cross-checking general amounts..36. Matching SADs and book Checking of specific selected SADs against book Checking of specific selected book entries against Control of payments ..37. Successive sales ..37. Assists ..39. Royalties ..39. Contracts (value of goods and services supplied directly or indirectly by the buyer, Article 71(1)(b) of the UCC) ..40. Appendix A - Examples of documents which may be required by the Customs authorities for Customs Valuation purposes ..41. A commercial invoice for the goods, if any ..41. Appendix B - SPV ..43. Appendix C Annex 23-01 ..45. Annex 23-01 of Regulation (EU) 2015 Appendix D - Sample of a Valuation Order.

8 50. Appendix E Auditors Information gathering ..52. Possible risk indicators to select transactions to test ..52. Establishing the operator's Checks to be carried Appendix F - Further Information ..55. 4. Tax and Duty Manual Customs Manual on Valuation 1 Introduction What is Customs Valuation ? Customs Valuation is used to determine the value of goods when they are being entered into the various Customs procedures eg. import, export, warehousing and processing under Customs control. The Customs value is essential to determine the correct amount of any Customs duty to be paid on imported goods. Why is a Customs value necessary In the majority of cases Customs duty is charged as a percentage of the value of the goods being imported ad valorem duty.

9 In order to calculate the amount of duty payable the Customs value must first be established. Where is the legislation covering Customs Valuation ? The legislation relating to Customs value is set out in Articles 69 to 76 of Regulation (EU). No. 952/2013 (the Union Customs Code), in Articles 127 to 146 of Commission Implementing Regulation (EU) No. 2015/2447 (the Implementing Act) and in Article 71 of Commission Delegated Regulation (EU) No. 2015/2446 (the Delegated Act)). These Articles give effect to the Agreement on the Implementation of Article VII of the General Agreement on Tariffs and Trade (GATT). Where are the different duty types set out for goods?

10 Details of all Customs duty types are set out in the Combined Nomenclature (CN) of the European Union. Once the correct CN code has been established for the goods the type of duty applicable to that code can be checked in the CN. Assistance with establishing the correct CN code for goods is available in the Classification Unit, Revenue, Nenagh. Tel: 01 738 3676. Email: Is the Customs value used for any other purpose? In the European Union, the Customs value is required: for VAT purposes See Article 85 of Council Directive 2006/112/EC: In respect of the importation of goods, the taxable amount shall be the value for Customs purposes, determined in accordance with the Community provisions in force.