Customs Valuation

1. Customs Valuation

2. Legal Framework • The Customs Act No 88/2005 • Chapter V., Articles 14-19 • Regulation No 1100/2006 on the custody and customs clearance of goods • Chapter VII., Articles 52-70

3. Transaction Value • Art. 14 of the Customs Act • The Customs value of imported goods is the transaction value, i. e. the price actually paid or payable for the goods when sold for export to the country [...] • The same conditions apply as in the WTO Valuation Agreement

4. Inclusions • Art. 15 of the Customs Act • Commissions and brokerage, costs of containers and the the cost of packing • The value of materials, components ... incorporated in the goods; tools, dies, moulds ... used in the production; materials consumed in the production; engineering, design work, plans ... necessary for the production • Royalties and license fees related to the goods that the buyer must pay as a condition of sale

5. Inclusions • Art. 15, paragraph 2, of the Customs Act • The cost of transport of the imported goods to the port or place of importation • Loading, unloading and handling charges associated with the transport of the imported goods to the port or place of importation • The cost of insurance

6. Inclusions • Art. 15, paragraph 4, of the Customs Act • Costs and charges referred to in paragraph 2 (insurance, transport, loading, unloading and handling charges) shall be included in the customs value, regardless of whether the costs and charges were actually paid or not, provided that they can be determined on the basis of objective and quantifiable data

7. Legal Basis of Regulation 1100/2006 • Art. 18 of the Customs Act • Minister can issue further rules concerning the determination of customs value, taking into account the implimentation of Art. VII of GATT • The rules shall [...] specify how the customs value shall be determined in cases when the customs value of imported goods cannot be determined according to Art. 14 (Transaction value method) and that which shall be added to the customs value according to the provisons of Art. 15

8. Legal Basis of Regulation 1100/2006 • Art. 18 of the Customs Act • In the same way the Minister is authorized to issue rules concerning the assessment of the customs value of goods and rules of procedure in case there is reason to doubt the veracity of invoices and other factors mentioned in Article 14 and that which shall be added to the customs value according to the provisions of Article 15

9. Rate of Exchange • Art. 19 of the Customs Act • Customs value shall be based on an official adjustment rate of exchange registered by the by the Central Bank the last weekday before customs clearance • The rate of exchange for ... for currencies not registered by the Central Bank of Iceland shall be decided by the Director of Customs in consultation with the Central Bank of Iceland

10. Contesting a Transaction Value • Art. 56 of the Regulation • If the director of customs sees reason to doubt or verify the veracity of information contained in a customs declaration or accompanying documents concerning the transaction value of goods [...] the director may require the person responsible for the information in question [...] to supply further clarification or documents in proof that the transaction value is correctly stated

11. Contesting a Transaction Value • Art. 56 of the Regulation • If the director of customs doubts the veracity of information concerning the transaction value, notwithstanding the clarifications or documents supplied, or if further clarifications or documents are not supplied to the director of customs within a reasonable time limit, the transaction value cannot be used as a basis for the determination of the customs value

12. Valuation Hierarchy • Transaction value – Art. 14 of the Customs Act • Transaction value of identical goods – Art. 57 of the Regulation • Transaction value of similar goods – Art. 58 of the Regulation • Value based on unit price – Art. 60 of the Regulation • Computed value – Art. 61 of the Regulation • Other means consistent with the WTO Valuation Agreement – Art. 62 of the Regulation

13. Importation of Vehicles • Special provisons in Art. 63-70 of the Regulation • Apply to vehicles classified under headings Nos. 8701 to 8706 and 8711 of the Customs Tariff

14. Importation of Vehicles • Art. 64 of the Regulation • Gathering of information from neutral parties abroad on comparable values of vehicles. • Comparison of the transaction value of vehicles to the reference value of identical vehicles in the country of purchase. • Examination of whether the transaction value is abnormally low. • If there is reasonable grounds to doubt the veracity of the customs declaration or accompanying documents the transaction value will be contested according to Art. 56

15. Importation of Vehicles • Art. 65 of the Regulation • The customs value shall be the reference value of a new vehicle of the same type and subtype as specified in the List of Vehicles prepared by the Director of Internal Revenue, computed in accordance with the provisions of Art. 66

16. Importation of Vehicles • Art. 66 of the Regulation • Retail price of the vehicle as specified in the List of Vehicles prepared by the Director of Internal Revenue, • Value added tax, an estimated 12% seller’s mark-up, commodity tax and an estimated amount covering the charges included in the customs value shall be deducted from the retail price, • Then the value shall be depreciated, according to the age of the imported vehicle

17. Importation of Vehicles • Art. 67 of the Regulation • Reduction of the customs value on grounds of worse condition of the vehicle than would result from normal wear • Importer has to demonstrate that the value of the vehicle is less than that of normal vehicles of the same type and subtype

18. Importation of Vehicles • Art. 68 of the Regulation • If the vehicle is not to be found in the List of Vehicles of the Director of Internal revenue, a probable retail price of the type being imported shall be determined and the customs value computed in accordance with Art. 66 • Art. 69 of the Regulation • Special depreciation procedure for residents abroad immigrating to the country if they bring along a vehicle

19. Gap Analysis • Icelandic rules on customs valuation are in accordance with the WTO Valuation Agreement and thus very similar to the rules of the EU • Special provisions on the importation of vehicles • Currency exchange rate • Transport, insurance, loading, unloading and handling fees are included in the customs value regardless of whether they were actually paid or not • No simplified procedure

20. Thank you for your attention!