Discover the ins and outs of EU Customs Valuation by downloading the Customs Valuation Compandium of the EU. Learn how to declare the correct customs value and navigate complex rules.
Why customs value matters
Calculating customs duties and value-added tax (VAT) involves determining a percentage of the value of the goods being imported or exported. To ensure accuracy and consistency, clear rules need to be established for both economic operators and customs authorities. The World Trade Organisation (WTO) has developed a Customs Valuation Agreement, which provides a universally accepted standard for measuring what constitutes value. This agreement helps to ensure fair trade practices and reduce disputes between countries.
It is crucial to accurately determine the value of imported goods for economic and commercial policy analysis, as well as for the proper collection of import duties and taxes. Additionally, import and export statistics rely on precise determination of the value of goods. The value of imported goods is one of the three factors used to assess the customs debt, which is the amount of duty that must be paid. The other two factors are the origin of the goods and the customs tariff. Once the value of the goods is determined, customs duties can be calculated with accuracy.
WTO Customs Valuation Agreement
The customs valuation legislation is based on the WTO Customs Valuation Agreement, which was formulated under Article VII of the Agreement. The Agreement is available in three languages: English, French, and Spanish.
However, each WTO member must incorporate the WTO Agreement into their respective national customs legislation. In the European Union, this incorporation is done through the Union Customs Code, Delegated Act, and Implementing Act.
In addition to the WTO legislative texts, the WCO Technical Committee produces various tools that provide further guidance on interpretation and application at the international level. Customs administrations also develop tools to help them administer valuation matters effectively. At Customs Manager Ltd., we use all of these tools to ensure that our clients correctly apply the Customs Valuation rules.
About the Compendium
The Compendium provides valuable insights and guidance on interpreting and applying Customs Valuation legislation within the EU. It contains legal provisions and accompanying texts and was last published in consolidated form in 2022. Since then, there have been several rulings and conclusions adopted, and certain implementing provisions have changed. The Compendium also offers a summary of judgments made by the Court of Justice of the European Union.
Customs Valuation rules are fixed, but implementation is dynamic
Each import is unique and cannot be compared to another. Consequently, the relevant transaction contents cannot be standardized for customs value calculation. For instance, the purchase price may not be fixed at the time of import, or there may be no comparative values available for similar goods. The production processes in foreign countries may involve multiple tiers and involve follow-up processes from third parties.
Therefore, the customs valuation law must remain flexible and dynamic. The production, licensing, and procurement processes should be thoroughly documented and analyzed to ensure a proper and accurate customs valuation and calculation.
In summary, this compendium focuses on various customs methods that are vital for accurate customs valuation and calculation.
There are usually six ways to work out the value of goods for Customs Duty, VAT calculations and trade statistics. They are covered by this guidance in detail.
2022 EU Customs Valuation Guidance
2021 EU Customs Valuation Guidance
EU Customs Valuation Guidance Document
2018 Compendium of EU Customs Valuation Texts
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