Customs and tax authorities pursue different objectives in assessing the value of goods traded between related parties. Nonetheless, in pursuit of efficient global supply chains, there is a growing need for better alignment between TP and customs valuation. Leonardo Macedo, Kriti Velji and Brigitte Baumgartner share their insights on the interaction between TP and customs valuation. They will discuss the WCO Guide to Customs Valuation and TP, relevant case studies, customs valuation methods compared to OECD TP methods, as well as the most recent Hamamatsu CJEU C-529/16.

1. Virtual Tax Summit – 13 March 2018 - Leonardo Macedo and Kriti Velji

2. Main Points:
• Customs and Tax (Administrative Structures, HR, IT)
• Valuation Systems: Import Tariffs vs. Corporate Tax
• GATT/WTO – Tariffs (International Law), Compulsory,
Trade Disputes / OECD-UN Corporate Tax, Voluntary,
National legislation.
• WTO CVA – Related Parties Art. 15.4. Examine Sale
Circumstances Art. 1.2(a). Test values. Comparability
issues.
• WTO & WCO Instruments / WCO & OECD – Guide CV -
TP
Virtual Tax Summit – 13 March 2018 - Leonardo Macedo and Kriti Velji

3. Customs and Tax
Administrative Structures, HR, IT
Virtual Tax Summit – March 2018 - Leonardo Macedo and Kriti Velji

4. GATT/WTO CVA
GATT 1947 – 1994
1979 Customs Valuation Code
Optional
WTO 1995
Customs Valuation Agreement
(CVA) - Compulsory
Virtual Tax Summit – March 2018 - Leonardo Macedo and Kriti Velji

5. WTO CVA – Related Parties
Examine Sale
Virtual Tax Summit – March 2018 - Leonardo Macedo and Kriti Velji

6. WTO CVA – Test Values
Identical or Similar ?
MNE´s TP Documentation to Examine Sale
Virtual Tax Summit – March 2018 - Leonardo Macedo and Kriti Velji

7. CV – TP Key Challenges
• TP Documentation Should Be Customs Friendly;
• TP Data dialogue - Customs Data
• Hard-to-Value Intangibles (WTO CVA Adjustments Art.8 / BEPS Action 8)
and Financial Sale Aspects (Interests, Entity loans, Related Services)
• Advance Pricing Agreements (APAs) (Tax and Customs MoUs)
• Advance Rulings for Customs Valuation (Customs and Tax)
• Year-end TP Adjustments – Upwards or Downwards (Customs
consequences) (EU Case C-529/16 Hamamatsu Photonics Deutschland
GmbH)
Virtual Tax Summit – March 2018 - Leonardo Macedo and Kriti Velji

8. WTO – WCO Relevant Instruments
WTO Decision - Treatment of interest charges in the
Customs value of imported goods.
Virtual Tax Summit – March 2018 - Leonardo Macedo and Kriti Velji

9. CV / TP – Comparison Table

10. Thank you
Reference material
• WCO Guide to CV and TP. Available for download at:
http://www.wcoomd.org/~/media/wco/public/global/pdf/topics/key-
issues/revenue-package/15-_-wco-guide-to-customs-valuation-and-
transfer-pricing-_-final_en.pdf?db=web
• e-Valuation Compendium. WCO Bookshop:
http://wcoomdpublications.org/
• OECD Action Plan on BEPS. Available for download at:
•https://www.oecd.org/ctp/BEPSActionPlan.pdf
Contact info
Leonardo Macedo: https://www.linkedin.com/in/macedoleo/
Kriti Velji: https://www.linkedin.com/in/kriti-velji-ab009416/
Virtual Tax Summit – 13 March 2018 - Leonardo Macedo and Kriti Velji