Taxology's Lawyers Specializing in Customs Practices Protected Our Client’s Interests in a Dispute
The customs authority considered that the management fees paid by the importer to its parent company included royalties for administrative know-how. In this regard, the customs included part of the remuneration in the customs value of the goods.
The court sided with the company and considered this recharacterization illegal. The case is peculiar for the following reason: if the additional charges are recognized justified, the customs authorities could regularly implement recharacterization of companies' transactions just as the tax authorities do, which can negatively affect participants in foreign economic activity.
The court considered two more cases within the framework of this dispute:
- a dispute about whether an agent invited by the declarant can be recognized as a procurement agent, whose remuneration should not be included in the customs value of goods, if the agent concluded contracts with both the importer and the supplier of goods simultaneously. The customs authority insisted that such an agent is a broker and their fees are included in the customs value.
- the costs for the transportation of goods across the Russian Federation, if they are incurred under freight forwarding agreements and are confirmed only by the freight forwarders’ invoices during the inspection.
The court sided with the declarant on all three cases.