Transcript TRANSACTION VALUE

Additions to the Price Paid
Content
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Price Paid or Payable
Additions
Additions - Category 1
Additions - Brokerage Expenses
Additions - Commissions
Commissions/Buying Commissions
Buying Commission
Selling Commission
Additions - Category 2
Additions - Category 3
Additions - Category 4&5
Royalties and Licence Fees
Royalties
Trademark Licences
Licences – conditions of sale
Price Paid or Payable
 The price actually paid or payable is the total payment made or
to be made by the buyer to, or for the benefit of, the seller for the
imported goods. It includes all payments made or to be made as
a condition of sale of the imported goods by the buyer to the
seller. It may also include payments made by the buyer to a third
party to satisfy an obligation of the seller.
 Payment need not necessarily take the form of a transfer of
money. Payment may be made by way of letters of credit or
negotiable instrument. It may be made directly or indirectly.
 Indirect payment settlement of a debt owed by the seller by the
buyer
Additions
 valuation rules define certain additions to o the price
actually paid or payable.
 only those listed in the list
 must be based on objective and quantifiable data.
Where no objective or quantifiable data available =>
the transaction value cannot be used.
Additions – Category 1
 (additions - if they are deserved by the buyer and not included in the price)
 value of containers in which are the goods contained at the time of
importation and in which the goods will be sold. Their cost should be
included in the customs value. For customs purposes, they are considered a
part of actually imported goods (e.g. camera cases, musical instrument
cases…)
Returnable containers – can be excluded; but charges payable by the
importer to the senders for returnable containers must be included.
Containers as the goods – to be valuated according customs valuation goods
Transportation containers - cost of the use of the container is included in the
customs value as part of the transport costs
 Cost of packing, comprising the cost both of labor and materials.
Packing - any external or internal containers, holders, wrappings or supports
other than transport devices (no transport containers), covers, tackle or
additional transport equipment. The cost of any such packing and packing
materials should be included in the value for customs purposes.
Additions – Brokerage Expenses
 Customs clearance charges (Brokerage expenses),
either included in the price or otherwise charged to
the importer, are included in the value for duty;
 Only if they relate to pre- importation costs!
Additions – Commissions
 fees paid to a commission BUYING or SELLING agent
 agent seems working on his account – in fact works on
account of the seller or the buyer
 Regular commission agent =>written commission
agreement (but verbal agreement allowed)
• selecting suppliers or purchasers
• procuring samples of goods
• procuring or selling goods according to the order
• inspecting the goods
• organizing or monitoring storage, transportation and
insurance of goods
Commissions/Buying Commission
 The agent has to prove the activities he performed (e.g.
detailed evidence of costs, contracts and invoices )
 Has to follow the booker instruction
 No responsible for any delays (payment or delivery)
Buying Commission
commission
Buyer
Kazakhstan
Buying Agent
Seller
Invoice price
Invoice price
One purchase
2 invoices:
1st issued by the seller for goods; 2nd by the buying agent for commission
1st issued by the buying agent for goods; 2nd by the buying agent for
commission
Customs
value
Buying Commission
One invoice: Addition to the Customs Value
 issued by the buying agent. Cleary separated: One part
for the price of goods; 2nd part for buying commission
 issued by the buying agent. One price includes goods
and commission; (in case of future proof of separation
can be refunded)
 Same scenarios as above but issued by the seller.
Very unusual - risk factor! Make sure that it is not
selling commission!
Selling Commission
Manufacturer
Selling
agent
Seller
Clearance
time
• Goods sold for export at the time of
clearance; Selling commission is
either included in the price or should
be added
• Goods were not sold at the time of
import clearance yet. Value –
identical/similar goods provision; the
commission should be added to
this value
• As above, but no info on identical or
similar goods transaction price; sale
price is known =>deduction
method
B
C
Buyer
Buying
Commission
Additions – Category 2
Assists(additions - if they are not included in the price)
 items supplied, directly or indirectly and free or at a
reduced cost, by the buyer for use in the production and
sale of the goods
 materials, components, parts and similar items
incorporated in the imported goods;
 tools, instruments, moulds and similar items used in the
production of imported goods;
 materials consumed in the production of the imported
goods; and
 engineering, development, artwork, design work, and
plans and sketches (other than research and preliminary
design sketches) carried out elsewhere than in the Country
of importation and necessary for the production of the
imported goods.
Additions – Category 3
 Royalties and License fees that the buyer must pay,
(directly or indirectly, as a condition of sale of the goods
being valued if hey are not already included in the price.
 Royalties and licence fees should not be added to the price
if:
 charges for the right to reproduce the imported goods in
the Country of importation; or
 payments made by the buyer for the right to distribute or
resell the imported goods if such payments are not a
condition of the sale for export to the Country of
importation.
Additions – Category 4&5
 Category 4
 the value of any part of the proceeds of any
subsequent resale, disposal or use of the imported
goods that accrues, directly or indirectly to the seller;
 Category 5
 transportation and insurance costs
 loading and handling charges associated with the
transport of the imported goods to the place of
introduction of the goods into the Country of
importation.
Royalties and Licence Fees
 Patents
 Trademarks
 Copyrights
 Should be considered as a part of the customs value
only if:
- related to the goods actually imported
- they are paid as condition of sale => the buyer
should paid for goods + licence fee
Royalties
Ingredients, parts, components imported for further
manufacturing in the country of importation;
unassembled goods or minor operation included
Payment
Seller
(licensor)
Ryls
Goods
Importer
(manufacturer)
 Royalties are paid for patents
 Should be related to imported goods
 Should be added to the price actually paid or payable
Trademark Licences
Considered as a part of the customs value if:
 Goods to be re-sold in the same state or only minor
operation to be performed after the importation
Minor operation:
- Labeling
- Cleaning
- Re-packing
- Simple assembling of goods after importation
Trademark Licences
 Goods marketed with the trade mark; Trade mark can be
affixed before or after the importation
 No matter when the trade mark affixed(some goods are
usually labeled after their importation - e.g. goods in bulk)
 The buyer cannot obtain these goods from suppliers not
related to the seller
 Seller – buyer => licence agreement; quality standards
should be kept.
Licences – Condition of Sale
 Licence fees can be added to the customs value if they
are condition of sale
 Imporer must pay price of the goods + licence fees
 goods cannot be neither bought nor sold if the
licence fees were not paid
 Recipinet’s of the royalties or licence fees residence
country does not affect the valuation. Can be located
een in the country of importation
Questions?
 Thank you for you attention!