Goods arriving and passing through the service must be given a price in order to be traded in the destination country. But how do you determine this? During customs clearance, in addition to the correct classification of the goods, it is necessary to correctly value them and estimate their customs debt.
Why is a customs valuation of products made?
Customs valuation of imported goods is carried out in order to determine their customs value upon import or export. Customs value is important for several reasons:
- The customs value serves as the basis for calculating customs duties and taxes that must be paid when crossing the border. The customs value is used to determine the duty and tax rates that are charged on imported goods.
- Trade statistics: Customs value is also used to collect statistics on international trade. This data is important for analysing and monitoring trade flows between different countries.
- Ensuring fair competition: Customs valuation aims to ensure fair competition in the market. By properly determining the customs value of goods, unfair practices such as dumping (selling goods for less than their cost of production), which can lead to trade distortions, can be avoided.
- Detection of illicit trade: Customs valuation is also a tool in the fight against illegal trade, such as smuggling, customs fraud and evasion. Through correct customs valuation, attempts to circumvent customs and tax regulations can be detected.
Different methods of making a customs valuation
Performing a customs valuation of imported goods is not uniform and can be done by several methods, which will be outlined below:
- The transaction value method is the most commonly used method, which involves estimating the value on the basis of the relevant transaction price, i.e. the price the seller receives.
- The identical goods value method. This method is based on determining the customs value with reference to the price at which an identical good was sold in another country.
- The method of value of goods with similar characteristics. Here, goods that present similar characteristics to the goods to be customs valued are considered. This is done in case there is no identical good, in which case the value of the good most similar in quality to the good to be dutiable is taken.
- The reconstructed value method - deductive. In this method, it is determined on the basis of the cost of production prevailing in the importing country, adding an appropriate profit margin.
- The computed method. This is based on the cost of production, including materials, labour and profit and costs associated with the production of the imported good. To apply the method, we must have adequate data on production costs.
- The fall-back method. In case it is not possible to estimate the value by the above methods, there is another alternative method. In this case, the value of the good is estimated on the basis of, among other things, the insurance value of the good.
In practice, different customs valuation methods are used depending on the available data and circumstances. The aim is to ensure a fair and adequate valuation of the customs value of the imported goods.
So if you would like to determine the customs value of imported goods, you can consult our customs agents, who will help you understand the mechanisms of customs valuation and prepare the right documents.