Deductive method
Fourth customs valuation method based on the resale price of goods in the EU, from which post-import costs are deducted.
Definition and principle
The deductive method is the fourth customs valuation method in the WTO Agreement hierarchy. It is used when the transaction value of imported, identical, or similar goods cannot be determined. It starts from the highest unit selling price at which imported goods (or identical/similar goods) are sold in the EU to persons not related to the seller, and deducts certain elements.
Legal framework
The deductive method is provided for by article 74, paragraph 2, point (c) of the UCC and corresponds to article 5 of the WTO Customs Valuation Agreement. Delegated Regulation 2015/2446 (articles 142 to 144) specifies the deduction modalities. The importer may request the reversal of the application order with the computed value method (method 5).
Elements to deduct
- Commissions usually paid or agreed, or usual profit margins and general expenses
- Transport and insurance costs incurred in the EU after import
- Customs duties and internal taxes payable in the EU as a result of import or sale
- Value added by further processing in the EU (if applicable — "super" deductive method)
Key considerations
- The selling price used must correspond to the first sale after import, in the condition in which goods were imported (except "super" deductive method)
- The sales used must involve a sufficient volume to constitute a reliable unit price
- Sales to related parties are excluded from the calculation base