On import, the customs value serves, among others, as a basis for calculating:
- customs duties
- anti-dumping, anti-subsidy and retaliatory duties
- import VAT, subject to some adjustments
- the guarantee that must be provided in the case of suspended duties and taxes as part of suspensive customs procedures.
Customs duties generally represent a percentage of the value of the goods declared for import.
The customs value is also used to
Customs value is defined using several methods.
Transaction value method
When imported or exported goods are purchased or sold, their customs value is in theory based on the price effectively paid or to be paid (transaction value). The transaction value is supported by the commercial documents (invoices, etc.).
If the goods are invoiced in a foreign currency, an official conversion rate must be used.
To obtain the customs value, certain elements must be added to the transaction value if they are not included in the sale price, in particular:
- fees for insurance, transport, handling and/or loading until the point of entry into or exit from the EU customs territory, including any additional transport fees (fuel costs invoiced separately). The calculation depends on the sale conditions that are often documented by the use of an Incoterm
- all payments effectively made or to be made to the seller that are a condition of the sale of the imported or exported goods, including partial payments and indirect payments to a third party on behalf of a seller
- for imported goods:
- the costs of processing not included in the sale price
- the initial analysis fees when such fees are a condition of the sale
- any assistance in the production of goods in a third country (molds, cutout templates, etc.)
- the royalties and license fees, including any brand royalties if they are a condition of the sale and if they are directly related to the imported goods
- any engineering work and studies executed outside the EU, etc.
The transaction value on import must be reduced by certain elements if they are included in the sale price, in particular:
- the costs of insurance, transport, handling and/or unloading from the point of entry in the EU customs territory, to the place of destination in the EU;
- the purchase commissions and any interest for deferred payment, etc.
In principle, price reductions agreed upon after acceptance of the customs declaration do not give the right to a reduction in customs value.
In case of doubt as to the declared transaction value, the Customs Administration may request additional information. If any doubt remains, it may impose the use of a substitute method.
With regards to goods that are not sold at the time of import (for example: free, rented or loaned goods), there is no transaction value. The customs value is then determined using a substitute method, implemented in the following order:
- the comparative methods take into account the transaction value of other identical or very similar goods imported in the same time period and originating from the same country
- the deductive method takes into account the unit price of resale after import, from which are deducted the generally applicable commissions and margins and various fees occurring after import
- the calculated value method takes into account the cost of raw materials and manufacturing operations, profits and general expenses, as well as costs of transport and insurance
- the fall-back method takes into account all reasonable means based on concrete and quantifiable data provided by the importer.
The customs value of fruits and vegetables
Fruits and vegetables are generally imported without sale, thus without transaction value. In this case, the importer may use:
- either the ordinary substitution methods
- or the unit price method, for some fruits and vegetables, the list of which is defined by European regulations. These unit prices may be viewed in the TARIC database and are valid for 14 days.
In addition, during some periods, certain fruits and vegetables are excluded from the unit price method and ordinary substitution methods by European regulation. In this case they must be declared by using a standard import value.
The unit prices should not be confused with the standard import values that are distributed and updated daily by the European Commission.
Declaration of value
In practice, a detailed calculation of the customs value is part of the customs declaration.
Unless special authorization exists, a detailed value declaration must theoretically be completed for imported goods when the following conditions are met:
- the customs value is greater than 20,000 euros
- customs duties are due.
The value declaration is made using the eDouane system.