EU Rules Intercompany Pricing not to be use for customs purposes

Posted on: 05/01/2018

On 20th December 2017, the European Court of Justice (ECJ) issued an important decision in respect of the use of intercompany transfer pricing for customs valuation for imports in the EU. The judgment bars the use of intercompany transfer prices for EU imports if (as is commonly the case) these are subject to retroactive adjustments.  Consequences of the Ruling: If retroactive Transfer Pricing adjustments are made, the intercompany transfer price cannot be used as the transaction value for Customs purposes.  This means that EU importers who buy from related vendors may have to change the basis for valuation of their EU imports.

Though with this judgment, the ECJ has essentially cut off the connection between transfer pricing for corporate tax purposes and the transactional taxable base for customs duties  Read the Hamamatsu Photonics Case Judgement HERE

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