The transaction value, which form the basis for the customs value, may not be determined taking into account a flat-rate adjustment made after the end of the accounting period, where it is impossible to know at the end of the accounting period whether that adjustment would be made up or down.

Comments: The Court stresses that Tax Authorities may not rely upon transfer pricing rules to assess the customs value a posteriori. The customs value is the taxable amount for Customs duties and import VAT purposes. VAT is due in principle on the price effectively received by supplier. That is the concept of "subjective value" consistently elaborated by the E.U.C.J.. The open-market value, which can be regarded as an effect of transfer pricing standards in terms of VAT, may be seen as the taxable amount only where the conditions of Article 80 EC-Directive 2006/112/EC are met.

An importer may adjust the customs value declared upon importation where it is established that, at the time of release into free circulation, there was a manufacture-related risk that the goods might potentially become defective in use, and in view of this, the seller, pursuant to a contractual warranty towards the buyer, grants the latter a price reduction in the form of reimbursement of the costs incurred by the buyer in modifying the goods in order to exclude that risk.

The time limit for the price adjustment is three years. It is not necessary for the importer of record to prove that the goods were actually defective upon importation. Demonstrating the potential risk is sufficient.