License fees and customs value: the deferred valuation mechanism becomes a reality

On November 1, 2016, the Collegium of the Eurasian Economic Commission introduced substantial changes to the rules for applying the procedure for deferred customs valuation of goods (Decision of the Eurasian Economic Commission Collegium No. 133 dated November 1, 2016). The EEC Collegium decided to expand the list of cases in which that procedure can be applied.
As of December 2, 2016, participants in foreign economic activity will be able to apply the procedure not only when declaring the value of exchange commodities but also when determining the amounts of license fees, and when declaring the customs value of goods whose price depends on their subsequent sale.
In the procedure for deferred customs valuation, the customs value is declared based on available documents or using forecast (planned) figures known to the declarant at the time of customs processing. After the goods are released, the customs value must be adjusted based on documented and actually incurred expenses or received income. The maximum time period for submitting the updated information is 15 months from the registration of the customs declaration.
If the updated customs value is higher than the preliminary value, the additional customs payments can be paid without penalty. In the opposite situation, the excess customs payment will be refunded at the written request of the declarant.
The procedure for deferred customs valuation can be used when placing goods under the customs procedure of release for domestic consumption and when claiming the first method of customs valuation. It is expected that these rules will considerably simplify the process of determining customs value (for example, when license fees are calculated on subsequent sales of imported goods).
Thus, the existing mechanism for amending a customs declaration after the goods have been released and the procedure for deferred customs valuation will make it possible to solve a problem that has long vexed businesses: the inclusion of license fees in the customs value of imported goods.
Dentons’ tax and customs lawyers have substantial experience in advising companies on customs valuation and approaches to payment of license fees. Because the procedure for deferred customs valuation is fairly new in enforcement practice, it is important to develop a surefire strategy for taking advantage of this opportunity. We would be happy to assist you in implementing the procedure for deferred customs valuation and in other matters relating to the application of customs legislation.

Dzhangar Dzhalchinov

About Dzhangar Dzhalchinov