• Customs Value of Goods

On 23.01.2018, the Minister of Finance and Economy approved Instruction no. 3, dated 23.01.2018 "On valuation of goods for customs purposes" (the "Instruction"), entering into force upon its publishing in the Official Journal (i.e. 26.01.2018).

The customs valuation is the procedure of determining the value of the goods and services related to them for customs purposes, which is the basis for calculation and payment of ad valorem customs duties (including VAT).

Transaction Value Method

Pursuant to law no. 102/2014 "Customs Code of the Republic of Albania" (the "Customs Code"), there are six methods for assessing the value of goods. The first and main method is the "Transaction Value" method, according to which the value of goods corresponds to the price actually paid or payable for the goods when sold for export to the customs territory of Albania, adjusted, where necessary. The paid or payable price is the full payment carried out (or that shall be carried out) by the buyer to the seller (or a third person for the benefit of the seller) and includes all payments made or to be made as a condition of sale of the imported goods.

However, the transaction value shall apply provided that all of the following conditions are fulfilled:

  1. there are no restrictions as to the disposal or use of the goods by the buyer, other than any of the following:

    1. restrictions imposed or required by a law or by the public authorities in Albania;
    2. limitations of the geographical area in which the goods may be resold;
    3. restrictions which do not substantially affect the customs value of the goods;
  2. the sale or price is not subject to some condition or consideration for which a value cannot be determined with respect to the goods being valued;
  3. no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made;
  4. the buyer and seller are not related, or the relationship did not influence the price.

The "Transaction Value" is used as the valuation method when the main documentation submitted for this purpose is complete and from the reviewing of the circumstances under which the transaction is carried out and the risk classification, there are no reasonable doubts that the declared transaction value is different from the total amount paid or payable.

The documentation required for performing the determination of the customs value includes:

  • invoices, including the trading invoice or any equivalent document and the transport invoice (when transport of goods in not included in the main invoice);
  • insurance of goods document;
  • quality certificate;
  • certificate of the origins of goods.

Risk indicators

The following is a non-exhaustive list of risk indicators, which may serve as basis for the customs authorities to perform an in-depth assessment of the transaction:

  • the history of customs regulations violations;
  • there is an evident difference between the declared value compared to the prices found in the National Valuation Database or prices published in stock exchanges/international agencies;
  • the value of goods has been declared by means of pro-forma invoices or invoices issued only for customs purpose;
  • there are indications for possible relation between the supplier and the operator;
  • there are different prices declared for the same product, by similar suppliers/origins;
  • the place of origin imposes risk;
  • the country of origins is different from the country where the goods are transported/delivered;
  • the content of the invoices from the same supplier is not the same;
  • there are successive sales (chain sales);
  • a third trader or company is involved in the transactions;
  • the goods come from a country which does not have an agreement of reciprocal assistance with our country;
  • the payments are not carried out directly by the economic operator to the supplier;
  • the loading country does not correspond to the country and the address of the exporter;
  • there is a clear difference between the declared price and the prices of publications in various markets;
  • the value of the product cannot be lower than the values of the raw material with which they have been produced.

Additional documentation

When there are doubts on the accuracy of the transaction, additional clarifications and documentation may be required. The additional documentation includes the following:

  • the sale contract, in order to support different aspects of the sale;
  • document evidencing the payment;
  • the intellectual property rights contract;
  • the commission contract;
  • the transport documentation;
  • documentation related to the expenses for insurance of the imported goods;
  • accounting data of the company;
  • other documents and data.

Where the customs authorities have reasonable doubts whether the declared transaction value represents the total amount paid or payable, they shall inform the declarant on the grounds of such doubts. Upon request of the importer, the customs authorities shall notify in writing the customs valuation performed and the methods used by them.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.