Three Common Types of Customs Valuation Disputes and Their Countermeasures

Three Common Types of Customs Valuation Disputes and Their Countermeasures

In international trade, customs valuation is an important step to ensure the fair and reasonable collection of national taxes, as well as a key part of corporate compliance management. However, in actual operations, due to the complexity and variability of commodity prices, diverse trade backgrounds, and differences in policy understanding, valuation disputes often arise. Such disputes not only affect the normal operation of enterprises but may also result in unnecessary economic losses. This article will discuss three common types of customs valuation disputes based on news reports and propose corresponding countermeasures.

Firstly, one of the most common dispute types involves disagreements over the transaction price. Many enterprises encounter disputes when exporting or importing goods because the declared price differs from the price determined by customs. For instance, a case reported by the media involved an electronics export company whose declared price was deemed lower than the actual transaction price due to insufficient supporting documents, leading to a risk of additional tax payments. This situation usually arises from misunderstandings of the definition of the transaction price or inadequate provision of relevant documents. To address this, enterprises should strengthen their understanding of the Measures for Customs Determination of Dutiable Prices of Import and Export Goods of the People's Republic of China, clearly identifying which documents can serve as auxiliary evidence, and prepare thoroughly before transactions. Additionally, it is advisable to hire professional agencies to assist with complex customs clearance matters to mitigate risks arising from insufficient knowledge.

Secondly, the second common type of dispute relates to the classification of royalties and commissions. As globalization accelerates, technical cooperation between multinational companies has become increasingly frequent, making royalties an important cost that enterprises must confront. However, how to correctly distinguish fees that should be included in the dutiable value often becomes a focal point of contention. For example, a report mentioned that a pharmaceutical company was required to pay additional high tariffs because it failed to include patent licensing fees in its dutiable value calculation. This incident serves as a reminder that enterprises should pay particular attention to the terms regarding fee allocation in contracts to avoid subsequent troubles. Regular internal training sessions should also be organized to enhance employees' understanding of relevant regulations.

Finally, the third common type of dispute revolves around the calculation of transportation and related costs. In cross-border logistics chains, every step from loading and unloading goods to warehousing and final delivery to the buyer may incur additional cost expenditures. However, whether these costs should be included in the dutiable value requires judgment based on specific circumstances. Recently, a news story highlighted that a large mechanical manufacturing plant faced customs scrutiny due to its failure to properly record marine insurance expenses, resulting in part of the amount being excluded from the dutiable base. To prevent similar situations, enterprises should establish sound financial management systems to ensure all costs are traceable; simultaneously, they should optimize supply chain management processes using information technology to improve data transparency.

In summary, enterprises need to take multiple measures to strengthen preventive actions against customs valuation disputes. On one hand, by deeply studying laws and regulations, they can enhance their compliance awareness; on the other hand, they should leverage external resources such as consulting firms to obtain more professional guidance services. Only in this way can potential conflicts be effectively resolved, ensuring their legitimate rights are not infringed upon. It is hoped that the above suggestions can provide useful references for enterprises dealing with customs valuation disputes.