Concept of cost of transport in order to assess the customs value of the goods. Judgment of the ECJ of May 11, 2017
In order to assess the customs value of the imported goods, the article 32 (1) of the Customs Code provides that it shall be added to the price actually paid or payable:
“(i) the cost of transport and insurance of the imported goods, and (ii) loading and handling charges associated with the transport of the imported goods to the place of introduction into the customs territory of the Community”.
The main proceedings relates to decide whether the cost of commission and profit margin that a freight forwarder relays to its customer, as an intermediary, together with the actual costs of transporting the goods paid to a carrier, must be part of the customs value as “transport costs” or not.
In this case a company contracted the services of a freight forwarder for the transport of products to the European Union, its storage and the fulfilment of the formal import obligations. In turn, the freight forwarder contracted in its own name a carrier. For its services, the freight forwarder invoiced to his client the amounts invoiced to him by the carrier, increased by an amount corresponding to his own costs and to his profit margin, without distinguishing between these amounts and concepts.
In addition to the price paid for the products, only the transport costs invoiced by the transporters were taken into account as customs value in the importation of the products, that is to say, without considering the increase corresponding to the amount of the freight forwarder costs and their margin of benefit. The Tax Administration was contrary to this criterion, considering that onto the price actually paid for the goods should be added the entire price invoiced by the freight forwarder for transportation costs.
In response to the appeal of the company, the competent national court referred to the ECJ a question on whether the article 32 (1) (e) (i) of the Customs Code shall be interpreted as meaning that “transport costs” includes the supplement invoiced by the freight forwarder to the importer corresponding to his profit margin plus the costs incurred by the services rendered.
In this case, the ECJ is quite clear in pointing out that the concept of transport costs is not defined in the Customs Code and should therefore be interpreted autonomously and uniformly across the Union, being considered as an autonomous concept of Union Law and interpreted taking into account the objective pursued by the legislation.
The Court therefore refers to its own case-law (Case C-11/89, Unifert) where the Court considers that the concept of transport costs comprises all costs, whether they are principal or accessory, linked to transportation of the goods to the territory of the Union. Therefore, the determining criterion is that they are linked to the movement of goods regardless of whether such expenses are inherent to the actual transport or if they are necessary.
In conclusion, these costs are not limited to the amount invoiced by the transporters, but must take into account the costs and profit margin invoiced by the freight forwarder, since they are linked to the movement of goods.
A copy of the Judgment dated 11 May 2017 is included with case number C-59/16.
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