Customs value, line by line

Duties are not calculated on the price paid to the supplier, but on a reconstructed value. Here is what is added, what is deducted, and where the errors hide.

The first surprise when importing: the basis for calculating duties is not the amount on the supplier's invoice. It is the customs value, a reconstructed value that follows precise rules, and on which both duties and VAT then depend.

The starting point: the transaction value

The basic rule uses the price actually paid or payable for the goods when sold for export to the Union. That is your invoice, excluding discounts not obtained and items unrelated to the goods.

What gets added on

• Transport and insurance costs up to the point of entry into the Union: the well-known "CIF border" value.
• Loading and handling costs related to that transport.
• Buying commissions? No. Selling commissions? Yes, they are added.
• Royalties and licence fees that the buyer must pay as a condition of sale.
• The value of materials or tooling you supplied free of charge to the manufacturer.

What is not included

Transport within the Union after the point of entry is excluded from customs value, provided it is shown separately on the documents. The same goes for installation or assembly costs after importation, and for the duties themselves.

The complete sequence

Customs duties apply to the customs value. The VAT base takes that value, adds the duties, then the transport costs to the first place of destination in the Union. An upstream error is therefore carried through twice.

That is why an invoice that lumps goods and transport together without separating them costs money: without a breakdown, the whole amount goes into the taxable base.