Case law
18 April 2018

CJEU: effect of subsequent modifications of transfer prices on customs value of goods

The Court of Justice of the European Union (CJEU) has issued its first ruling on the effect of subsequent adjustments to transfer prices on the customs value of goods imported to the EU. According to the judgement, even if a group’s transfer pricing policy allows for the subsequent adjustment of prices, it is not possible to retroactively change the customs value of goods based on such adjustment.

Daniel Szmaragowski
Jan Nesvačil

The CJEU held that while retroactive adjustments of customs values may be admissible in certain situations (such as defects and shortages), EU legislation does not stipulate this for changes in the value of goods as a result of subsequent adjustments of the transfer price. The taxpayer requesting a refund of a part of customs duties paid on these grounds did not succeed, despite the fact that the group’s transfer pricing policy had been agreed with the German tax administrator by means of an advance pricing agreement. The ruling did not give a clear answer as to whether the same principle would apply in cases where a subsequent price adjustment resulted in higher customs duties.

In our opinion, some customs procedures could lead to customs duties being paid based on prices reflecting all related price adjustments; however, these would place a considerable administrative burden on both parties and necessitate lengthy negotiations with customs authorities.

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