A new judgment of the EU Court of Justice (The Shirtmakers BV, C‑59/16, 11/05/2017) puts the calculation of the customs value and its direct impact on VAT back to the front of the stage.

In accordance with the customs legislation, determining the customs value requires different elements to be added to the price actually paid or payable for the imported goods. This (notably) applies to the cost of transport and insurance of the goods as well as the loading and handling charges associated with the transport to the place of introduction into the customs territory of the Community.

In the case presented to the EUCJ, The Shirtmakers had recourse to the services of a Dutch forwarding agent for its importations. Upon establishment of the import documents, the price of the goods plus the costs charged by the transport companies, which were engaged by the forwarding agent for the effective transportation of the said goods, were taken into account for the calculation of the customs value. The costs and margin of the forwarding agent were however not included into the customs value.

According to the EUCJ, the concept of “cost of transport” to be added to the price of the goods in order to obtain the customs value (the latter having an influence on the VAT taxable basis) includes the supplement charged by the forwarding agent to the importer (his profit margin and costs), in respect of the service which it provided in organizing the transport of the imported goods.

This case gives a clear example of difficulties that may be faced upon the calculation of the customs value. In practice, that matter is often little known or largely underestimated. It however carries various risks and numerous opportunities as well. For further information, you may address your questions to [email protected].