Tag: Customs valuations

Argentina vs Malteria Pampa S.A., February 2019, Tax Court, Case No 35.098-A

Malteria Pampa S.A in Argentina exported malt to a related intermediary in Uruguay that in turn sold on the goods to the brewery in Brazil at a higher price. The tax authorities applied the Sixth method and issued an assessment where the export price was determined based on the latter price used in the transaction with the brewery in Brazil and a substantial fine was also issued to the Malteria Pampa S.A. for non compliance. Decision […]

TPG2017 Chapter I paragraph 1.138

Taxpayers may have competing incentives in setting values for customs and tax purposes. In general, a taxpayer importing goods may be interested in setting a low price for the transaction for customs purposes so that the customs duty imposed will be low. (There could be similar considerations arising with respect to value added taxes, sales taxes, and excise taxes.) For tax purposes, however, a higher price paid for those same goods would increase the deductible […]

TPG2017 Chapter I paragraph 1.137

The arm’s length principle is applied, broadly speaking, by many customs administrations as a principle of comparison between the value attributable to goods imported by associated enterprises, which may be affected by the special relationship between them, and the value for similar goods imported by independent enterprises. Valuation methods for customs purposes however may not be aligned with the OECD’s recognised transfer pricing methods. That being said, customs valuations may be useful to tax administrations […]

TPG2017 Chapter I paragraph 1.4

Factors other than tax considerations may distort the conditions of commercial and financial relations established between associated enterprises. For example, such enterprises may be subject to conflicting governmental pressures (in the domestic as well as foreign country) relating to customs valuations, anti-dumping duties, and exchange or price controls. In addition, transfer price distortions may be caused by the cash flow requirements of enterprises within an MNE group. An MNE group that is publicly held may […]

TPG1995 Chapter I paragraph 1.67

Although customs officials and tax administrations may have a similar purpose in examining the reported values of cross-border controlled transactions, taxpayers may have competing incentives in setting values for customs and tax purposes. In general, a taxpayer importing goods is interested in setting a low price for the transaction for customs purposes so that the customs duty imposed will be low. (There could be similar considerations arising with respect to value added taxes, sales taxes, […]

TPG1995 Chapter I paragraph 1.66

Both customs officials and tax administrations, however, generally seek to determine the value of the products at the time they were transferred or imported. (For tax administrations, the relevant time is generally when the contract for transfer is concluded, but in many cases this coincides with the time of transfer). Thus, customs valuations, because they may occur at or about the same time the transfer takes place, may be useful to tax administrations in evaluating […]

TPG1995 Chapter I paragraph 1.65

The arm’s length principle is applied, broadly speaking, by many customs administrations as a principle of comparison between the value attributable to goods imported by associated enterprises and the value for similar goods imported by independent enterprises.