Transaction value method
First and primary customs valuation method, based on the price actually paid or payable between buyer and seller, with regulatory adjustments.
Definition and principle
The transaction value method is the first of six customs valuation methods established by the WTO Customs Valuation Agreement. It must be used as a priority to determine the customs value of imported goods. Alternative methods (methods 2 to 6) can only be used when the transaction value cannot be determined.
Legal framework
Article 70 of the UCC establishes the primacy of the transaction value method. The WTO Customs Valuation Agreement (article 1) defines its fundamental principles. The interpretive notes to the Agreement and the advisory opinions of the WCO's Technical Committee on Customs Valuation provide detailed guidance. The hierarchy of methods is sequential: each method applies only if the previous one cannot be used.
Application of the hierarchy
- Method 1: Transaction value of imported goods (primary method)
- Method 2: Transaction value of identical goods
- Method 3: Transaction value of similar goods
- Method 4: Deductive method (based on the resale price in the EU)
- Method 5: Computed value method (based on the cost of production)
- Method 6: Fall-back method (reasonable adaptation of previous methods)
Methods 4 and 5 may be reversed at the importer's request.
Practical importance
- Approximately 90% of world imports are valued using the transaction value method
- Mastering this method and its adjustments is fundamental for any international trade operator
- Customs value errors expose operators to significant reassessments (additional duties, penalties, late interest)