Importation of licensed products: Do royalties and royalties need to be included in the value for duty?
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Theme: |
Customs and tax regulations |
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Country: |
EU |
The regulations specify that royalties and royalties should be systematically included in the value for duty when these charges relate to the goods to be valued (e.g. goods imported with the effigy of characters and slogans covered by the licences), but also where the licensee exercises direct or indirect control over the manufacturer.
Therefore, it remains to be determined for the manufacturer whether it is or not « under control » (direct or indirect) of its licensee...
According to a recent press release from the Directorate General of French Customs (DGDDI), the manufacturer is actually « under control » the licensee when the licensee:
- exercises real direct or indirect control over manufacturing (production centre and/or production methods);
- decide to whom the producer can sell the goods or impose restrictions on potential buyers;
- has the right to examine the accounts of the manufacturer or purchaser;
- restricts the quantities that the manufacturer may produce;
- has a specific product (design/design and brand);
- defines the product characteristics and the technology used.
In all these situations, the parties are considered to be related and fees must automatically be included in the value for duty.
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