The World Customs Organisation (WCO)Technical Committee on Customs Valuation has adopted two instruments (Advisory Opinions 4.18 and 24.1) concerning royalties and licence fees under Article 8.1 (c) of the WTO Customs Valuation Agreement (Agreement) and the Customs valuation treatment of imported goods bearing the buyer’s own trademark, respectively.
The WCO Technical Committee stressed that the two instruments, which were adopted at its recent 52nd Session held virtually, would support customs and economic operators in valuation and taking the right decision on taxes.
“These two instruments were adopted after a virtual session which extended over three days, having regard to the current circumstances relating to the pandemic. It rewards the efforts constantly being made by the Technical Committee to improve the certainty of the interpretation and uniform application of the provisions of the Agreement in all member countries of the WTO. Practical instruments of this kind help both Customs, the private sector and the members in the fair control of Customs valuation, the facilitation of international trade and the optimization of Customs revenue.
“In the first instrument, the Technical Committee gives its opinion on the valuation treatment of income tax deriving from the royalty paid to the country of importation’s tax authorities in accordance with the terms of the licence agreement signed by the importer and the seller, who is also the licence holder. The second instrument relates to the valuation treatment of the trademark belonging to the buyer and provided free of charge to the seller for use in connection with the production of the imported goods,” said the Technical Committee.
The instruments are yet to be approved by the WCO Council as the Technical Committee noted that once they have been approved, they will be available on the WCO Publications website and published in the WCO Customs Valuation Compendium.
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