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How Valuation and Transfer Pricing Impact Your Company
The valuation of imported products is a critical import issue because the duty charged on imported merchandise is generally a percentage of the declared value. Customs authorities around the world require that the full value of merchandise be declared at the time of entry, and often consider this to properly include side payments for royalties, license fees, agents’ fees, management fees, design work and other shared costs, as well as the value of tooling or equipment provided to the suppliers, manufacturers, subcontractors and agents.
The importer must be able to demonstrate that the price listed on the commercial invoice was the price actually paid to the seller, and when merchandise is sourced from related parties, that the relationship did not influence the price. The fact that transfer pricing has been approved by the tax authorities does not mean that it is approved for customs purposes.
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We evaluate relationships importers have with overseas vendors and agents to ensure they are declaring the lowest dutiable value permitted under the law.
We can confirm our position on value issues with the customs authorities through binding rulings and can fix any errors discovered and minimize or eliminate penalties through prior disclosures.
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