Customs Valuation and Transfer Pricing : ICC Proposals

Download or read book Customs Valuation and Transfer Pricing : ICC Proposals written by J-M. Salva and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The article studies the relationship between transfer pricing and customs valuation. The author explains two different approaches of transfer pricing, the first one adopted by tax agencies, based on the OECD Transfer Pricing Guidelines and the second adopted by customs agencies, based on the WTO Customs Valuation Agreement (CVA). From the business perspective, the divergence between the two taxation regimes is an obstacle to the liberalization of trade and inhibits international development for companies. On the other hand, the International Chamber of Commerce (ICC) believes that the WTO CVA and the use of the OECD Guidelines are enough to settle the issue of customs valuation and transfer pricing. However, ICC specifies that tax and customs approaches of intercompany transactions should converge to the same value. In this goal, ICC published a policy statement in 2012, which has been integrated in the WCO guidelines. This statement, based on the harmonization of the current rules, contains several additional options to derive customs value. The author states that the Union Customs Code does not contain any evolution from a transfer pricing perspective but contains some negatives changes regarding custom valuation. Also, the opportunity of the WCO Free Trade Agreement should be taken to move forward on this issue.