What is Customs Value? How is Customs Value Determined?

What does Customs Value mean? 

Customs value is intended for the application of the customs tariff and non-tariff regulations regarding trade in goods. It is referred to as the cost or value determined by customs legislation. Determining the customs value of a product to be exported is very important as it will affect the customs duty to be applied to that product.

Which exchange rate is used as a basis when determining the customs value of goods?

The value of the custom price must be declared to the customs administration in Turkish Lira. Foreign currencies on invoices are converted into Turkish Lira based on the foreign exchange selling rates of the Central Bank of the Republic of Turkey.

By which methods is the customs value of goods determined?

Customs value is determined by the methods specified below.

1-Transaction Value Method:

According to the Turkish Customs Law, it is the price actually paid or to be paid for the product. When determining the customs value, if the price of the goods has not been paid, the amount to be paid is taken as the basis.

2-Transaction Value of Identical Goods Method:

This method is applicable for products produced in the same country that are identical in every sense, such as physical and structural characteristics and quality. When determining the customs value, the sales price of identical or similar goods sold at the same commercial level or at the same price as the goods to be processed is used.

3-Transaction Value of Similar Goods Method:

When determining the customs value, the sales price of similar goods sold in approximately the same quantity as the goods to be processed is taken as the basis. The term "similar goods" here means that although they have minor differences, they are used for the same purpose, have similar characteristics, and are produced in the same country.

4-Deductive Value Method:

It is used in determining the customs value of the product if it is sold in Turkey upon import. It is determined on the basis of the unit price of the product according to the largest aggregate sales quantity made by the importer near the date of import.

5-Computed Value Method:

The customs value of the imported product is determined on the basis of the computed value. The importer must submit the necessary documents from the relevant authorities in the country of the producer company to the customs administration. It must be concluded with a document obtained from the relevant authorities in the producer's country stating that the documents are accurate and ready for verification.

6-Fall-back Method:

The customs value of a product whose value cannot be calculated using the above methods can be determined using methods in accordance with the principles of the clauses specified below.

• Agreement on the implementation of Article VII of the General Agreement on Tariffs and Trade

• Article VII of the General Agreement on Tariffs and Trade

• Provisions of the Customs Law and Customs Regulation regarding the Customs Value of Goods

If the customs value cannot be determined even by the "Fall-back Method", the items given below cannot be processed as a basis.

• a) The domestic selling price of goods produced in Turkey,

• b) The customs administration's adoption of the higher of two alternative values,

• c) The domestic market price of the product in the producing country,

• d) The cost of production other than computed values determined for identical or similar goods,

• e) The price of goods for export from Turkey,

• f) Minimum customs values,

• g) Arbitrary or fictitious values.

In determining the customs value, these methods must be followed sequentially. In other words, if a customs value cannot be found using the previous method, the next method should be applied.