Towards customs valuation compliance through corporate income tax

Abstract

Customs valuation is based, primarily, on the price actually paid or payable for the goods. The customs administration is a third party to the price, and so needs to rely on the price declared by the parties. Nevertheless, Customs can cross-check the value declared with the cost declared for the purposes of the corporate income tax base determination. The need for coherence between these two values is an important control tool for the customs administration, if properly used. The relationship between customs valuation and the inventory cost of the goods is complex, and an adequate understanding of this issue is necessary to make correct use of this control tool. This article provides an overview of the possibilities available to customs administrations.