Price actually paid or payable
Total amount paid or to be paid by the buyer to or for the benefit of the seller for imported goods, constituting the basis of the transaction value.
Definition and principle
The price actually paid or payable (PAPP) is the total payment made or to be made by the buyer to the seller or for the benefit of the seller for the imported goods. It constitutes the starting point for determining the transaction value. This concept encompasses all payments, whether direct or indirect.
Legal framework
The PAPP is defined by article 70, paragraph 2 of the UCC and by article 1 of the WTO Customs Valuation Agreement. The interpretive note to article 1 specifies that the PAPP includes all payments made "as a condition of the sale" of the imported goods. Delegated Regulation 2015/2446 (article 128 et seq.) provides additional clarifications.
Elements included in the PAPP
- The invoiced price on the commercial invoice
- Indirect payments: settlement by the buyer of the seller's debts, payments to a third party for the benefit of the seller
- Offsets: price reduction in exchange for other advantages
- Advance payments or deposits made before import
- Contractually agreed deferred payments
Key considerations
- The PAPP does not only comprise the amount on the invoice — the entire financial flows related to the transaction must be examined
- Discounts and rebates are taken into account if they are effective at the time of customs valuation
- Retroactive price adjustments (transfer pricing) may require a modification of the declared customs value
- The distinction between the PAPP and article 71 adjustments (transport, insurance, royalties, assists) is essential: the PAPP is the base, adjustments are added to or deducted from it