Simplified Customs declaration and Transfer Pricing. Modification of the Resolution providing instructions for the formalization of the SAD
Last September 1st was published in the Official Gazette the Resolution of August 25, 2017, of the Customs and Excise Department of the Tax Agency, which modifies the Resolution in which the instructions for the formalization of the SAD are set.
Among others, modifications are introduced with respect to simplified declarations, which are regulated in Articles 166 and 167 of the Union Customs Code (UCC). Under these articles of the UCC the Customs Authorities may agree to include goods under a customs procedure using a simplified declaration in which some of the information contained in Article 162 of the UCC or the supporting documents referred to in Article 163 of the Customs Code may be omitted. With the regulatory change introduced by the UCC, incomplete declarations have disappeared, deadlines to complete the simplified declarations have been modified and the minimum data to be declared have been changed.
Therefore, these changes require that the SAD filling instructions are amended and that a new Appendix VII to be introduced to facilitate the use of this procedure in relation to simplified commercial import declarations.
These simplified declarations can be filled for lack of documents or lack of data and, among this last block, the Resolution contemplates a case for multinational companies with Transfer Pricing, that is to say, those multinational groups that carry out transactions between related parties and that they must assure that its price policy for transactions between related parties reflects the full application of the principle of free competition, that is, that such transactions are valued at arm’s length, which is the same principle that must follow the transaction value in order to fix the customs value of the imported goods.
In those cases where the companies that carry out related party transactions and that determine the price of their transactions after taking place the transaction, are allowed to:
- To request a simplified declaration authorization according to article 166.2 of the UCC. In such request they must explain their operations, the provisional transaction value they want to use, how they have determined it and the term in which they will have the final value.
- The applicant must be the importer.
- The authorization, where appropriate, will include the customs value to be included in the initial declarations and the deadline for submitting the complementary declaration, taking into account the provisions of article 147.3 of the Delegated Regulation of the UCC, as well as whether it is authorized to be a recapitulative one.
- Simplified declarations shall be submitted in accordance with the provisions of sections 2.4.3 and 2.4.4 of the Resolution.
In summary, companies that follow a transfer pricing policy to determine the value of their related transactions and whose customs value is indeterminate at the time of importation may be authorized to submit a simplified declaration, for which the Customs Authorities must know in detail the studies of transfer prices thereof.