Customs value: how to calculate it, with a worked example

The principle: transaction value

In the European Union, valuation rules are set by the Union Customs Code, which follows the WTO Customs Valuation Agreement. The main method is the transaction value: the price actually paid or payable for the goods when sold for export to the EU, adjusted as provided by the rules.

This method applies in the vast majority of cases. When the seller and buyer are related (for example subsidiaries of the same group), the price is accepted if the relationship did not influence it.

Costs to add to the price

• Transport and insurance of the goods up to the place of entry into the EU
• Commissions and brokerage, except buying commissions paid to your own agent
• The cost of containers and packing treated as part of the goods
• Assists supplied free or at reduced cost by the buyer: moulds, tools, materials, design work carried out outside the EU
• Royalties and licence fees related to the goods that the buyer must pay as a condition of sale
• Any part of the proceeds of resale that goes back to the seller

Costs that can be deducted

These items are not part of the customs value, provided they are shown separately from the price (on the invoice or a separate document):

• Transport after arrival at the place of entry into the EU
• Construction, assembly, maintenance or technical assistance carried out after import
• Interest under a financing arrangement granted to the buyer
• Import duties and taxes payable in the EU (for example under DDP)
• Buying commissions

Currency conversion

When the invoice is in another currency, the value is converted into euros using the exchange rate set by customs for the month of the declaration, not your bank's rate or the rate on the payment date.

Worked example

A French company imports machine parts bought FOB Shanghai for €10,000. Sea freight to Le Havre costs €900 and insurance €60. Transport from Le Havre to its warehouse in Lyon costs €300. The duty rate is 4% and VAT is 20%.

• Customs value: €10,000 + €900 + €60 = €10,960
• Customs duties: €10,960 × 4% = €438.40
• Import VAT base: €10,960 + €438.40 + €300 (transport to the place of destination in France) = €11,698.40
• Import VAT: €11,698.40 × 20% = €2,339.68

When transaction value cannot be used

When there is no sale (free shipment, lease, consignment stock) or the price cannot be accepted, customs applies secondary methods in a set order: value of identical goods, then similar goods, the deductive method based on resale prices in the EU, the computed value based on production costs, and finally the fall-back method.

Common mistakes

• Declaring the EXW or FOB price without adding freight and insurance to the border
• Forgetting moulds or tools supplied to the manufacturer, or licence fees
• Deducting inland EU transport that is not shown separately on the invoice
• Using the wrong exchange rate
• Declaring samples or free replacement parts as having "no commercial value": a value must still be declared

Frequently asked questions