Successive sales (cross-trade): value for duty under the CDU

Customs valuation (one of the three pillars of customs with tariff species and origin) is essential to determine the amount of duty payable on an imported product.

In accordance with the provisions of the Union Customs Code (CDU), the first basis for determining the value for duty of goods is transaction value, i.e. the price of the goods when sold for export to the European Union.

This prize is supplemented by various elements (commissions for sale, transport and insurance costs,...)*.

For some triangular sales schemes (cross-trade) these regulations may, however, leave a doubt...

School case:

• A = supplier from a third country to the EU
• B = importer established in France (client of A)
• C = distributor established in Italy (client of B)

ImportantThe last seller (B) and final consignee (C) are both established on the European Union customs territory.

In this typical triangular sales scheme (cross-trade)

1. A makes direct delivery to C
2. A invoice B
3. B invoice C

As an intermediary in this transaction, B will apply a profit margin on the cost price of the goods. Thus the total amount of the A-B invoice will be less than the amount of the B-C invoice.

What about the value for duty to be taken into account in this scheme?

Under the provisions of Article 70§1 CDU, the type of transaction to be referred to isa sale for export to the Single Customs Territory (TDU).

However, in this regulatory framework, only sales involving import of goods from a third country to the EU customs territory may be used for customs valuation under the transaction value method.

In our example, It is therefore the invoice of supplier A which will have to be taken over when customs clearance on import into Italy.

ATTENTION

Prior to the introduction of the CDU on May 1, 2016, the transaction value of the goods that were the subject of successive sales prior to their release for free circulation could be based, at the importer's discretion, either on the last sale prior to introduction into the TDU or on a sale prior to its introduction.

CDU abandoned this device If there are several sales before the goods are introduced into the EU, the last sale must be retained before introduction into the TDU.

* A comprehensive list of elements to be included in the transaction value available to our subscribers on request.