‘Sales’ to branches
You cannot regard the transaction as a sale if the goods are imported:
- through a branch office which does not have a separate legal status of its own
- directly by the supplier’s own employees
- by a person or firm acting in the supplier’s name — for example, under Power of Attorney
This is because the parties involved in these transactions, are part of the same legal entity. A sale is a transaction between two separate legal entities.
Inter-company transfer or accounting
A company cannot sell to itself. This means you cannot use the prices shown on inter-company transfer or accounting documents to work out the customs value under Method 1.
You may be able to use an earlier sale. One example is if the supplier purchased rather than manufactured the goods to be valued. Find out how to identify which sale value to use in Method 1 (transaction value of the imported goods).
Sales to prior order
If the goods are imported for a prior order from UK customers, you can work out the value under Method 1. You would base the value on the price actually paid or payable by the buyer to the seller.
If there’s no sale
You cannot use valuation Method 1 if there’s no sale. You must try Methods 2 to 6 as explained in Prepare to work out the customs value of your imported goods.
If the intra-company invoice value is fully costed
If you can show that the intra-company invoice value between the head office and its branch or vice-versa represents a fully costed (arm’s length) price (check ‘If buyer and seller are related’ in Method 1), this would be acceptable under Method 6. It is consistent with the principles and general provisions of the World Trade Organization Valuation Agreement.
Using the different valuation methods
To work out the customs value you must try Methods 1 to 6.
Published 3 November 2022
