Presentation on theme: "Content General rules, Related parties, Price paid or payable, Introduction to the transfer pricing."— Presentation transcript:
Content General rules, Related parties, Price paid or payable, Introduction to the transfer pricing.
Importer’s Obligations Declare the correct value Provide Customs with all pertinent information so that it may verify correctness of declared value Imported goods to be appraised at Transaction Value unless transaction value is found inappropriate
Transaction value The price actually paid or payable is the total payment made or to be made by the buyer to or for the benefit of the seller for the imported goods, and includes all payments made as a condition of sale of the imported goods by the buyer to the seller, or by the buyer to a third party to satisfy an obligation of the seller. There must be evidence of a sale for export to the country of importation (i.e. commercial invoices, contracts, purchase orders, etc.).
When the Transaction Value can be used? no restriction on the disposition or use of the goods by the buyer, other than -imposed or required by law or public authorities in the country of importation -limiting the geographical area in which the goods may be resold do not significantly affect the value of the goods No part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless adjustment can be made
the seller does not establish the price of the imported goods on the condition that the buyer will also buy other goods in specified quantities; the price of the imported goods is not dependent upon the price or prices at which the buyer sells other goods to the seller; the price is not established on the basis of a form of payment extraneous to the imported goods.
sale or price not subject to some condition or consideration for which a value cannot be determined for the goods being valued buyer and seller not related or if related, transaction value acceptable for customs Burden is on seller to prove that the relationship does not affect the price
Related parties Members of the same family. Any officer or director of an organization and such organization. An officer or director of an organization and an officer or director of another organization, if each such individual is also an officer or director in the other organization. Partners. Employer and employee. Any person directly or indirectly owning, controlling, or holding with power to vote, 5 percent or more of the outstanding voting stock or shares of any organization and such organization. Two or more persons directly or indirectly controlling, controlled by, or under common control with, any person.
The transaction value between a related buyer and seller is acceptable if: An examination of the circumstances of the sale of the imported merchandise indicates that the relationship between such buyer and seller: did not influence the price actually paid or payable; or If the transaction value of the imported merchandise closely approximates (i) the transaction value of identical merchandise, or of similar merchandise, in sales to unrelated buyers in the State; or (ii) the deductive value or computed value for identical merchandise or similar merchandise value referred to in clause (i) or (ii) that is used for comparison must be exported to the State at or about the same time as the imported merchandise.
An importer may also demonstrate that the relationship between the buyer and the seller did not influence the price by establishing that: "the price is adequate to ensure recovery of all costs plus a profit that is equivalent to the firm's overall profit realized over a representative period of time in sales of merchandise of the same class or kind..."
Introduction to the Transfer Pricing To demonstrate transfer price, Importer should be prepared to provide: Worksheets calculating cost of materials, labor and fixed costs for specific merchandise. Audited financial statements, and information regarding the seller's costs for the subject items and the actual profit for them. Comparison of actual profit on items under review to profits incurred by company as a whole. Producer's profits and expenses should be consistent with those usually reflected in sales of merchandise of the same class or kind as the imported merchandise that are made by producers in the country of exportation for export to the State.