Customs Valuation The Organisation for Economic Co-operation and Development (OECD) on 16 September released its first recommendations for a co-ordinated international approach to combat tax avoidance by multinational enterprises. This under the OECD/G20 Base Erosion and Profit Shifting Project designed to create a single set of international tax rules to end the erosion of tax bases and the artificial shifting of profits to jurisdictions to avoid paying tax. What does this have to do with customs valuation? Well, it depends whether you consider imported goods (products) to be subject to a customs duty, a customs levy or a customs tax. Or does it? In the instance of cross-border trade a Customs authority would have a particular interest in transactions between related parties or multinational companies. According to Article 15 of Article VII of the General Agreement on Tariffs and Trade (GATT), known as the Agreement on Customs Valuation, there are eight instances in which persons are deemed to be related. But how significant, if at all, are related party transactions in world trade? According to the referenced OECD document, up to 70% of world trade is now estimated to be between related parties, or multinational companies providing goods and services to one another through cross-border transactions. (In the instance of services, it is a transfer pricing matter. According to the OECD, only 60 governments have adopted transfer pricing rules to curb base erosion.) This begs the question, can transfer prices be accepted as customs value? In the words of a true Economist, “it depends”, but the elaboration for another day. 3rd Supply Chain Finance Summit The International Chamber of Commerce (ICC) will be hosting its third Supply Chain Financing Summit on 22-23 October in Paris. The summit will provide a unique opportunity to learn from experienced corporates and senior bankers about their visions and strategies in the area of supply chain finance. With the climate of volatility during this economic crisis, innovations in working capital solutions are more vital now than ever before. Trade Facilitation Back on the Agenda On 18 September the ICC appealed to trade negotiators who were reconvening in Geneva to bridge the gap and implement the World Trade Organisation’s (WTO) Trade Facilitation Agreement (TFA), following the breakdown in talks in July. According to the ICC there is no logic in delaying implementation of a deal that could add a possible US$1 trillion to global gross domestic product (GDP) and in the process generate millions of jobs. Ever considered the potential benefit for South Africa? Duty Calls’ Watch List Comment on the 2015 Customs Tariff is due by 08 October 2014 and on the Draft Interpretation Note on Additional Investment and Training Allowances for Industrial Policy Projects on 14 November 2014.
