Customs Valuation and Transfer Pricing Cross border trade between multinational enterprises or MNEs, intra-firm transactions if you will, is estimated to account for in excess of 60% of international trade. In the United States of America (USA), for instance, it accounts for 67% of its imports from emerging countries. (It is not certain what amount of SA’s merchandise trade constitutes intra-firm transactions. I am not aware of any such figure having ever been made public, but one would guess that it too would be in excess of 60%.) A substantial part of the intra-firm transactions consists of the transfer of goods, intangibles and services. As a consequence, customs valuation and transfer pricing – the latter within the confines of international taxation – should be a top priority for tax administrations as well as MNEs. The particular interest should of course be in the instance of differing customs valuation and transfer pricing policies and objectives. The World Customs Organisation (WCO) and the Organisation for Economic Co-operation and Development (OECD) held two joint WCO/OECD Conferences on Transfer Pricing and Customs Valuation in Brussels in 2006 and 2007. Each of these events was attended by almost 300 participants from all over the world, representing customs administrations as well as revenue authorities, multinational enterprises, international organisations, consulting firms and academic institutions. A focus group was set up as a follow up to the recommendations of the second Joint WCO-OECD Transfer Pricing Conference of May 2007 in order to identify problems and suggest possible solutions. As recommended by the focus group, the Technical Committee on Customs Valuation (TCCV) examined the phrase ‘circumstances surrounding the sale’ in Article 1.2 of the WTO Valuation Agreement in respect of its application to transfer pricing situations. At its 31st Session in October 2010 the TCCV approved Commentary 23.1 which recognises that a transfer pricing study may be used as a basis for examining the circumstances of the sale. The WCO Secretariat and TCCV are currently conducting further work that will further assist tax authorities in the determination of the customs value in transactions between related parties. The OECD and the International Chamber of Commerce (ICC) are assisting in this process. CV and TP Workshop A joint WCO/OECD workshop on Customs Valuation and Transfer Pricing for Americas and Caribbean Customs and Tax administrations was held in the OECD- Mexico Multilateral Tax Centre, Mexico City from 23 to 27 March 2014. Duty Calls Watch List Comment on the proposed new regulations relating to the grading, packing and marking of table olives intended for sale in South Africa is due by 29 May 2015. Comment on the request for the implementation of statutory measures in the pomegranate industry for four years effective from January 2016 is due by 16 May 2015.
