A Guide to Customs Valuation

Customs valuation is a process used to establish the value of goods declared for import. Determining the customs value of a good is critical in determining the level of customs debt that a business will be required to pay.

How to calculate the customs value
How do I choose the most appropriate valuation method?
What evidence should I retain?
Are these methods the same for businesses in Ireland and Northern Ireland?
How do I value goods which are lost?
How do I value goods which are defective?
How do I value goods if there are branch offices or inter-company transfers?
Should I include delivery costs in the customs value?
How do I calculate Import VAT?
What items are not included when calculating Import VAT?
Useful Contacts

How to calculate the customs value

The first step in determining value is choosing the correct method by which to calculate it. There are six methods. These are:

Valuation Method	Title	Description
Method 1	Transaction Value	This is the most common method of valuing an item for customs purposes. This simply refers to the price paid by a buyer to the seller.
Method 2	Value of Identical Goods	These are goods which are produced in the same country as the goods being valued. They must also share other characteristics such as the physical description, quality, and reputation.
Method 3	Value of Similar Goods	This is where the value of an item is based on similar goods which have some different characteristics but: Are produced in the same country. Carry out the same tasks. Are commercially Interchangeable .
Method 4	Based on Selling Price of Goods in the UK	Value based on the price in which imported goods are sold in the UK. It is possible to use this method for sales which take place up to 90 days after importation.
Method 5	Based on the Cost of Production of the Goods	This value must cover the following: Cost of all materials used in processing. All containers and packaging. Producer’s profit and General Expense. Cost of transport, insurance, and loading.
Method 6	Fall-Back Method	This is used in rare circumstances where none of the above methods can provide a value. This is where a combination of the methods is used to determine a value.

Once the most appropriate method has been chosen businesses should work through the method and make any necessary adjustments, additions, or deductions to determine the customs value. More information about each valuation method can be found in this comprehensive Revenue.ie Customs Manual on Valuation.

How do I choose the most appropriate valuation method?

Businesses must consider each valuation method in numerical order, starting at method one. The only exception to this is method five, which may be considered before method four.

It is important to note that businesses may be asked to justify their choice of valuation method and why they did not choose an earlier method.

What evidence should I retain?

The method chosen will determine the evidence required to illustrate the valuation. It is important that all documents are retained for at least the next four years. More evidence about what information needs to be retained for each method can be found in this collection of guidance about working out the customs value of your imported goods from GOV.UK.

Businesses in Ireland can find more information in this customs valuation information from Revenue.ie.

Are these methods the same for businesses in Ireland and Northern Ireland?

Yes, the methods used to value goods for customs purposes were defined by the World Trade Organisation. As a result, these methods are used for most countries, including both the UK and Ireland.

How do I value goods which are lost?

If a business did not receive goods as they were lost in transit or short shipped, then there will be no duty payable.

How do I value goods which are defective?

If a business can demonstrate that goods were damaged prior to being cleared by customs it may be possible to amend the customs value. For a request to be granted suitable evidence will need to be provided.

Examples of evidence which may be provided includes:

a credit note from the seller
a statement from the customs officer who examined the goods
a certificate of condemnation
a statement from the Port Health Official
a statement from an independent expert such as a surveyor
details of settlement of claim against insurer or carrier.

How do I value goods if there are branch offices or inter-company transfers?

Businesses cannot use the price paid on an intercompany transfer as a means of determining value under Method One (Transaction Value). If there is no sale, businesses will not be able to use Method One and will instead need to consider Methods Two to Six.

Should I include delivery costs in the customs value?

Businesses will need to declare all delivery costs up until the place of introduction to the market. This can be the port of arrival if travelling by either sea or air or the point where goods first pass a customs office if travelling by road.

There are various types of transport costs that can be deducted and some that need to be included when calculating customs value. More information about which costs should be included / deducted can be found in this guidance on Delivery costs to include in the customs value from GOV.UK, or in the Revenue.ie Customs Manual on Valuation.

How do I calculate Import VAT?

To establish the value for VAT, businesses should add the following to the customs value:

Commission, packing and transport costs
Customs duty or levy payable upon import
Excise Duty
Incidental expenses such as Customs Clearance fees, storage costs and handling expenses.