What is the Customs Value Of Imports Goods? Identify, Note

1. What is the customs value of imported goods?

According to clause 24 of Article 4 of the 2014 Customs Law, the customs value of imported goods is the actual cost to be paid by the enterprise at the first entry gate. This definition is applied on the basis of the General Agreement on Tariffs and Trade or under international commitments that Vietnam has entered into.

In addition, in accordance with Article 86 of the Customs Law 2014, the customs value is specified as follows:

• The value will be used as the basis for the calculation of import and export duties. It also supports customs statistics later on.
• Customs value for export goods when the sale price is taken into account at the exit gate (excluding insurance fees and international shipping fees).
• The customs value of the imported goods is the real price paid by the enterprise at the first entry gate, the legal basis of Vietnam, and the international treaties to which our country is a member.

2. Methods for determining the customs value of imported goods

There are currently six methods to determine and use the customs value of imported goods. The methods for calculating the actual value include:

• Calculation of the transaction value of imported goods;
• Identical import transaction value;
• Calculation of the transaction value of similar imports;
• Calculation of deductions
• Calculate the calculated value.
• Value by inference.

With these methods, we find the transaction value calculation to be the top priority if your shipment meets all the conventional conditions. In cases of non-qualification by transaction value, the enterprise will continue to use the remaining methods in the order listed above. In the process of finding such a method, you stop at a calculation that can determine the customs value of the shipment.

This customs value is the actual price you pay when the goods arrive at the first entry gate. Accordingly, the way to determine the first entry gate for the goods is as follows:

• The form of transportation by sea, air, or port of first importation is the port for the disembarkation of goods specified on the certificate.
• The first entry gate is the border gate for goods to enter the territory of Vietnam and is declared in the customs declaration.
• The form of transportation of goods by rail, the first gateway of importation, is identified as the international intercontinental railway station declared on the customs declaration.

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3. The Role of Customs Value in Import Goods and Export Operations

Customs valuation plays an important role in the export and import of goods throughout the country. Customs pricing will help to manage import and export policies. In addition, the customs value also helps determine the import and export duties they need to pay.

Specifically, the role of customs value to the state and to the enterprise is as follows:

• Value role in state management:
  • Statistics and controls exports and imports to and from countries. Based on this, the state will have appropriate development policies to help develop and stabilize the country's economy.
  • Support in the enforcement and implementation of the provisions of customs laws, import and export taxes, foreign trade, etc. Ensure the security of the goods order by identifying and monitoring the customs value.
  • Statistics of imports and exports by phase.
  • The determination of customs value will contribute to the formulation of domestic import and export policies. Besides, it helps the state adjust its policies to suit the market.
  • Article 4 of Customs Law No. 54/2013 states that the customs value is the value of imported and exported goods for the purposes of taxation and customs statistics. Customs valuation is the basis for applying import-export tariffs and statistics on export-import goods.
• The Value Role in Business Management:
  • Businesses and individuals who trade in goods related to export and import are responsible for customs duty declarations and statistics of goods.
  • The determination of customs value also helps the business determine the tax payable on the shipment. Based on that, the enterprise adjusts its own purchase price and sells reasonably on the market.
  • Determining customs value also helps operate in accordance with Vietnamese law.
  • The determination of customs value is the basis for enterprises to develop regulatory measures and risk management policies based on market volatility.

4. Customs value declaration of imported goods

In accordance with the provisions of Article 18 of Circular No. 39/2015/TT-BTC, the subject of the customs value declaration shall be those entities whose foreign goods are imported into Vietnam. However, the following circumstances will not require the customs value declaration of imported goods:

• The group of goods is subject to duty-free, tax-exempt status in accordance with the provisions of the Law on Export Taxes and Import Taxes.
• Group of export goods by type of import of raw materials to produce exports.
• The import group has no sales contract or trade invoice.
• The commodity group is eligible to apply the transaction value method in accordance with Article 6 of Circular No. 39/2015/TT-BTC. As well as having declared sufficient information about customs value on the system import declaration. 

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5. The principle of declaration is the submission of a statement of value

In accordance with Article 20 of Circular No. 39/2015/TT-BTC, the principle of declaration and filing of customs value declaration is as follows:

• Businesses need to accurately declare the value details on the customs value declaration for each of the respective items. The customs value declaration will be based on the information in the import declaration. The order numbers of the goods declared in the customs declaration shall be consistently numbered, uniform, and consistent with the order number of those goods on the import declaration through the gate.
• Customs value declaration and import declaration are inseparable. They will be filed with the import declaration when the goods are shipped through customs.

According to the regulations, the declaration of customs value of imported goods shall be drawn up in two copies; the customs authority shall keep one copy; and the owner of the shipment order shall keep one copy. The value declaration will be archived with the import declaration in accordance with the law enacted.

6. Pre-defined code, origin, and import customs value

In accordance with the provisions of Article 28 of the Customs Law 2014, the pre-determination of the code, origin, and value of customs goods is as follows:

• In case the declarant has a need to request the customs authorities identify items such as code, origin, and prior customs value for the goods intended to be exported or imported, then:
  • The declarant must prepare and provide full information, relevant administrative documents, and samples of goods to be exported to the customs authorities. From there, the customs authorities predetermined for the enterprise the number, origin, and customs value of the shipment.
• If the enterprise is unable to provide a sample of goods intended to be exported or imported, the declarant must provide the technical documentation relevant to this item.
  • The customs authorities will rely on the legal provisions on the classification of goods, customs value, origin, and the relevant information and documents provided by the declarant to pre-identify the code, customized value, and origin. Then there will be a written notification to the enterprise to make the customs declaration with the results.
• In cases where there is insufficient information or grounds for determining the requirement, the customs authorities will notify the enterprise or request the supplementation of the relevant documents.
  • 60 days after the written notification of the result, if the customs declaration entity does not agree with the pre-determined result, it is entitled to request re-examination.i. 
• It is the duty of the customs authorities to review and respond to the declarant's results within the time limits laid down in the Customs Act.
  • A pre-defined outcome notification will be legally valid. Based on this, the customs authorities will conduct customs procedures when the goods actually exported and imported match the information, legal documents, and samples of goods provided by the customs declaration enterprise.

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7. Notes when determining customs value

When determining customs value, you need to pay attention to a number of issues regarding goods imported and exported into countries. Keep these notes up-to-date so that the declaration of goods is quick and errors are avoided.

7.1 For exports

For export goods, the customs value will be based on the following steps:

• The sale price of the goods to the first exit gate will be clearly stated on the sales contracts, the legal trade invoices, and the documents related to the shipment. 
• If it is not possible to determine the value of the export duty, we will re-check the customs data at that time. The purpose of this is to determine two values for identical exports. Similarly, we will use the lowest value to calculate the value of the export duty.

7.2 For imported goods

For the determination of the customs value of imported goods, we will do as below:

• Apply the method of determining the customs value of import duties: The actual price paid by the enterprise at the first entry gate is determined by applying the six methods of value determination described above. The enterprise will determine and stop the method by which it discloses the customs value.

8. Frequently Asked Questions About Customs Value

The regulations surrounding the issue of customs value are complex and take a long time to understand. In particular, we need to fully understand the provisions of the Customs Law in order to comply with it. Some of the most frequently asked questions during customs declarations are:

8.1 What is a Customs Value Database?

The Customs Value Database contains all the information that is relevant to the determination of the customs value of imported and exported goods in our country. This database is collected, classified, and aggregated by the customs authorities according to the general criteria and regulations of the Ministry of Finance.

The General Department of Customs will be the central building unit to unify the data on the customs value and regularly update it from time to time. The Customs Value Database represents the risks to the value of goods in the country's export-import sector.

8.2 Check basis, customs value determination.

The basis for checking and determining customs prices is clearly stipulated and issued in Clause 1 and Article 21 of Decree 08/2015/ND-CP. The inspection and determination of customs value will be based on the criteria of:

• Customs records of the shipment
• Certificates and documents relating to goods
• Real shipment

The above information relates to the customs value of imported goods so that enterprises can understand and comply with state regulations. If your business needs to learn more about the customs procedures and regulations, follow Dolphin Sea Air's website or contact our hotline at 1900986813 for support!

• DOLPHIN SEA AIR SERVICES CORPORATION
• Hotline: 1900986813
• Email: saleshan6@dolphinseaair.com
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