Importing goods – methods used to calculate the customs valuation

By Tolley
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The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Importing goods – methods used to calculate the customs valuation
  • Method 1 – transaction value
  • Method 2
  • Method 3
  • Method 4
  • Method 5
  • Method 6

This guidance note provides an overview of the methods that must be used to calculate the customs valuation of goods imported into the EU. This note must be read in conjunction with the Importing goods – overview – calculating the customs valuation and Importing goods – methods used to calculate the customs valuation – other considerations guidance notes.

Businesses must use one of the following six methods in order to calculate the amount of customs duty payable when goods are imported. The importer must use the methods in a hierarchical fashion; if method 1 can be used then the importer must use it. Over 90% of imports will be valued using method 1. If the importer cannot use method 1 then it must move onto method 2. If the importer cannot use method 2 then they must try method 3 and so on. However there is an exception to the hierarchy, an importer is entitled to use method 5 before method 4 if they so wish (and the importer can use SPV or SIV systems if it imports fresh fruit and vegetables).

HMRC Notice 252 ; De Voil Indirect Tax Service V17.161 (subscription sensitive); Regulation (EU) No 952/2013 (UCC) ; Commission Implementing Regulation (EC) 2015/2447 ; Commission Delegated Regulation (EU) 2015/2446 (DA) 

The methods are explained below.

Method 1 – transaction value

This method must be tried first and used to calculate the amount of customs duties due in the vast majority of cases.

Method 1 is a transaction value method based on the price actually paid or payable for the goods when the goods are sold for export to the Community. This generally means the total amount paid, or to be paid, by the buyer to, or for, the benefit of the seller for the imported goods. The value must include all payments made or to be made as a condition

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