TPG1979 Chapter I Paragraph 29

« | »

Customs administrations, broadly speaking, also apply the principle of arm’s length pricing and use it also to provide a neutral standard of comparison between values attributable to goods imported by associated enterprises and values for similar goods imported by third parties. Since customs and income tax administrations are not always looking at the same sort of transfers (customs being concerned with transfers across borders, with or without change of ownership, and income tax administrations being concerned with transfers between entities),. and since customs administrations have traditionally examined goods at the time of importation while income tax officials consider the price at the transfer of ownership sometime after the transaction has taken place, and for other reasons, the approaches of the two administrations have sometimes differed. In more recent years, however, a number of customs administrations have found it increasingly impracticable to consider imports by MNEs on a consignment by consignment basis and have begun to apply methods analogous to those described in this report to reach an acceptable price for a range of imported goods. Co-operation between income tax and customs administrations in reaching such a price is becoming more common and this should help to diminish the number of cases where customs values are found unacceptable for income tax purposes or vice versa.


(See Article VII of the General Agreement on Tariffs and Trade and the Convention on the Valuation of Goods for Customs Purposes signed in Brussels on 15th December, 1950 which is based on that article.)






Related Guidelines


Related Case Law