Customs formalities and measures play an important role in international trade and in business transformation. Harmonization of customs legislation within the EU is virtually complete, and various chapters of customs legislation, such as those pertaining to customs valuation and the origin of goods, have been standardized around the world. There are nevertheless fundamental differences in the interpretation of these rules, both inside and outside the EU.
Please find set out below an interesting recent development concerning EU customs valuation rules.
Customs Value: EU Commission abolishes ‘Domestic Sale’
With the Union Customs Code (Regulation (EU) No 952/2013) entering into force on 1 May 2016, also new rules have been introduced on EU customs valuation. These rules are important in order to calculate the total amount of duties and levies upon the import of goods into the EU (for example import- and anti-dumping duties).
A sales price that is being used as basis for establishing the customs value of the imported goods must have been agreed for the goods when sold for export to the customs territory of the Union. The Guidance Customs Valuation (TAXUD B4/(2016) 808781 rev2, of 28 April 2016) further explains this ‘sale for export’. This guidance currently mentions that a ‘domestic sale’, being a sale between a seller and a buyer which are both established in the EU, is not considered a sale for export. This particular guidance is however about to change. The ‘Customs Expert Group on Customs Valuation’ of the EU Commission has recently decided to delete all references to a ‘domestic sale’ from the Guidance Document (please see the link for the minutes of the 5th meeting of the Customs Expert Group – Customs Valuation Section: http://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupMeetingDoc&docid=23146).
The Customs Expert Group on Customs Valuation will have a following meeting at the end of October 2019 to agree on the amended Guidance Customs Valuation. The new Guidance document is expected to be published beginning 2020. Companies with international supply chains involving EU import should carefully assess the possible impact of the upcoming abolishment of the domestic sale for their COGS (Costs of Goods Sold).
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