Everything about an import calculation rests on what is declared: what the goods are, where they come from, and what they are worth. Classification and origin get attention because they are visibly technical. The value looks obvious — the invoice says what the goods cost — and it is the one that produces the largest retrospective assessments, because the invoice is only the starting point of a calculation with additions and deductions that nobody at the factory was told about.
The invoice is where the calculation starts, not where it ends
The primary method takes the price actually paid or payable for the goods when sold for export to the Union, and then adjusts it. « Actually paid or payable » is wider than « invoiced »: it covers everything the buyer pays to the seller or for the seller's benefit, whether in one payment or several, and whether described as price or as something else. Where that transaction value cannot be used — no sale, a sale on conditions that cannot be valued, a price influenced in a way that cannot be explained — customs moves through a fixed hierarchy of alternative methods, ending in a reasonable determination from available data. You do not want to be valued that way: you lose control of the number and you spend the audit arguing about someone else's comparables.
What gets added to the price you invoiced
- Transport, loading and insurance up to the Union's frontier. Carriage to the place of introduction, handling, and insurance on that leg are part of the value even when the buyer pays them separately. Which is why a quotation that excludes freight does not produce a lower customs value — only a less complete invoice.
- Royalties and licence fees, when they are a condition of the sale. If the buyer must pay for a trademark, a design or a technology in order to be allowed to buy the goods, that payment belongs in the value even when it is invoiced elsewhere, later, and by a different company of the group.
- Tooling, moulds and designs supplied to the manufacturer free of charge. When the buyer provides the mould, the die, the component or the engineering work and does not charge for it, its value is apportioned over the goods produced and added. This is the addition exporters forget most often, because nothing about it ever appears in an accounting system as a sale.
- Selling commissions and brokerage. A commission paid to someone acting for the seller is added. A commission paid to an agent acting for the buyer is not — and the distinction is decided by what the agent actually does, not by the word used in the contract.
- Packing and containers treated as part of the goods. The cost of packing, labour and materials, where it is borne by the buyer and not already in the price, is part of the value. Retail packaging developed in Europe and sent to the factory falls squarely in here.
What can be taken out, if you can prove it
- Transport inside the Union. Carriage from the place of introduction onwards is excluded, provided it is distinguished from the pre-frontier leg in the documents. A single door-to-door price with no breakdown cannot be split by the declarant's assertion alone.
- Duties and taxes payable in the Union. The duty and the import VAT themselves are not part of the value on which the duty is computed. Obvious once stated, and a frequent error in a landed-cost spreadsheet reused as a customs value.
- Buying commissions. Excluded, when separately shown and when the agent genuinely represented the buyer. The burden of showing that falls on the declarant, with a mandate and an invoice that match what actually happened.
- Work done after import, and interest on deferred payment. Assembly, installation, maintenance or technical assistance carried out after importation can be excluded when shown separately. Interest under a written financing arrangement can be excluded when it is distinguished and the price would stand without it.
- In every case, the condition is documentary. Each deduction stands on an invoice line, a contract clause or a transport document that an officer can read. A deduction that exists only in an internal calculation is, from the administration's point of view, an understatement.
Why customs examines a sale between related companies closely
A European subsidiary buying from its Chinese parent is a related party transaction, and the relationship alone does not disqualify the price. What the rules allow customs to do is examine whether the relationship influenced it, and to ask the declarant to show that it did not — typically by demonstrating that the price is consistent with sales to unrelated buyers, or with the way prices are set in that industry. The group's transfer pricing documentation is relevant here and it is not an answer. It was built for income tax, it reasons on aggregate margins over a year, and customs values a specific consignment on a specific day. A transfer pricing file offered as a customs valuation file usually raises more questions than it closes.
The hard part is the year-end adjustment. Groups commonly true up the subsidiary's margin after the fact, which retroactively changes the price of goods already imported and valued. Upward adjustments generate additional duty that has to be declared; downward adjustments may open a repayment claim, and only if the right arrangements were in place at the time of import. Some Member States allow a declaration with a provisional value, to be regularised later under an authorisation. Others handle it through amendments. The decision that matters is made before the first shipment: tell the customs administration that your prices are subject to adjustment, and agree how the adjustment will be reported, rather than discovering during an audit that years of imports were valued on figures the group itself later changed.
What under-invoicing costs on the day it is found
A buyer asks for a lower invoice, « just for customs », and promises to settle the rest another way. It is the oldest request in the trade and it is a false economy for a reason that has nothing to do with morality: the saving is small and recurring, the discovery is single and retrospective. When an audit finds it, the duty and the import VAT are recalculated over the whole period the administration may review, with interest and penalties. Authorisations go with it — deferment, simplifications, trusted operator status — and those are what made your logistics work. The notice goes to the declarant, which means your own European subsidiary or the customer you talked into it, and the second payment trail exists in your banking records for anyone who asks. In serious cases the matter stops being administrative. And the commercial damage is the part people underestimate: a European buyer who receives a retrospective assessment because of your invoicing does not negotiate, it leaves.
Build a valuation note once, for each product family, and keep it with the commercial file: the price basis, the commercial term and therefore which transport leg is already in the price, every royalty or licence payment and whether it conditions the sale, any tooling or artwork you supplied free of charge, and who each commission is paid by and for. If the sale is to a related company, add how the price is set and whether it is adjusted after year end. That note is what an officer asks for, it is what your customs representative needs in order to declare correctly, and writing it is how you find out — before an audit does — which of your additions nobody has been declaring.
Where to read it yourself
Official pages, opened and checked on 15 October 2026. Where a rule changes, these are the addresses that change with it — this article does not.