8. Method I: Transaction value

Introduction

Transaction value is the primary method for determining Customs value and accounts for roughly 85–95% of all import declarations globally. The transaction value is the price actually paid or payable for the goods when sold for export to the country of importation, adjusted in accordance with Article 8. The General Introduction to the Agreement on Implementation of Article VII of the GATT states that Members recognize that the basis for Customs valuation should, to the greatest extent possible, be the transaction value.

The method follows five steps:

01

Identify

The import sales transaction.

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02

Determine

the price paid or payable.

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03

Deduct

allowable deductions.

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04

Add

Article 8 additions.

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05

Convert

currency if required.

Article 8 adjustments

✔ Added to the price (Article 8)

✘ Not added to the price

·         Commissions and brokerage (except buying commissions)

·         Containers and packing costs and charges for export preparation

·         Production and services “assist” costs

·         Royalties and license fees

·         Overseas freight and insurance

·         Proceeds of subsequent resale, use, or disposal that accrue to the seller

·         Financing costs

·         Assembly, erection, construction, maintenance, or technical assistance after importation

·         Inland freight and insurance in the country of importation

·         Duties and taxes of the country of importation

·         Costs, charges and expenses undertaken by the buyer on the buyer’s own account