The issue of determining the customs value of goods when provisional prices are used, as well as price adjustments as well as post-importation price adjustments, raises many questions. Despite the significant CJEU ruling in the Hamamatsu case (C-529/16), there is still no uniform approach within the European Union, and the divergent practices of local customs authorities further complicate the situation for importers. Should customs declarations be corrected due to post-import price adjustments? And in such cases, can the transaction value (which, in simple terms, is the value determined based on commercial invoices) even serve as the basis for customs duties? Importers have been asking these questions for years. In this context, the ruling in case C-782/23 Tauritus may provide valuable guidance. While the CJEU has not yet ruled, an opinion has been presented by the Advocate General of the CJEU, Manuel Campos Sánchez-Bordona.

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Subject of the dispute

The case concerns the Lithuanian company Tauritus, which declared the customs value of fuel imports on the basis of provisional prices. These prices were subsequently adjusted based on objective market factors, such as average fuel prices and exchange rates during the relevant period. During customs declarations, the company declared the customs value based on provisional prices (using an alternative method of determining customs value), considering that at the time of the declaration, it was not possible to determine the final transaction value of the goods.

Position of Lithuanian Authorities and Courts

During an audit conducted by the Kaunas Customs Office, the company's approach to declaring the customs value was challenged. The customs authorities concluded that the appropriate method for determining the customs value in this case is the transaction value method and adopted the final prices from the corrective invoices as the basis. As a result of the audit, the company was obliged to pay additional import VAT along with interest for late payment, calculated from the date of acceptance of the original customs declarations to the date of the audit report.

The Regional Administrative Court in Vilnius upheld the legitimacy of charging the disputed interest. However, the Supreme Administrative Court of Lithuania held a different view, considering it unjustified to apply the transaction value method based on the final price, which was not and could not have been known at the time of importation and submission of the original declarations. After the case was reconsidered by the customs authorities, which upheld their position, and following another appeal to the Regional Administrative Court in Vilnius, the case was once again brought before the Supreme Administrative Court of Lithuania. The court decided to refer preliminary questions to the CJEU.

Opinion of the Advocate General

Advocate General of the CJEU, Manuel Campos Sánchez-Bordona, presented his opinion on this matter. He pointed out that the customs value should reflect the actual economic value of the imported goods at the time of importation. Therefore, if the final price is not known at that time, it is acceptable to use provisional prices, provided they are based on objective and verifiable data. The Advocate General also emphasized that subsequent adjustments to the price should lead to corresponding corrections in the customs value and related duties.

With regard to procedural matters, the Advocate General placed particular emphasis on the proper method of adjusting the customs value after the release of goods. In his view, when provisional prices are used, importers should rely on the mechanism of supplementary declarations, as provided for in Article 167 of the Union Customs Code (UCC). This position is especially significant because the Advocate General explicitly stated that the procedure for amending a customs declaration, regulated in Article 173(3) UCC, is not the appropriate tool for accounting for adjustments resulting from the application of provisional prices. This distinction is of fundamental importance in practice, as it provides importers with clear guidance on the correct procedural path to follow when making price adjustments after the release of goods.

In his opinion, the Advocate General also emphasized that the mere inability to determine the final price at the time of the customs declaration should not automatically exclude the use of the transaction value method. However, what is crucial is that the conditions determining the final price must be clearly defined and verifiable by customs authorities at the time of the declaration.

Practical implications

The forthcoming ruling will have an impact on the operations of:

  • Importers using provisional prices in commercial contracts,
  • Companies operating within corporate groups, particularly regarding transfer pricing adjustments,
  • More broadly, any entities making post-import adjustments that affect the declared customs value, influencing both the requirement or possibility of amending declarations (for outstanding duties or overpayments) and the appropriateness of the chosen customs valuation method.

This ruling could significantly influence the practices of customs authorities across EU countries and affect the audits and inspections conducted by these authorities.

Differences compared to the Hamamatsu case

It is important to highlight that the Advocate General clearly distinguished the present case from the well-known Hamamatsu ruling (C-529/16). Unlike in Hamamatsu, where price adjustments resulted from complex transfer pricing mechanisms, in Tauritus, the Advocate General noted that the conditions for adjustments were clearly defined and based on objective market criteria. However, there are undeniable similarities between the two cases:

  1. Both cases are significant in terms of the necessity/possibility of adjusting the customs value based on the transaction value after importation. They also address whether the transaction value method can be applied when a post-import adjustment is certain, expected, or possible but its exact amount cannot be determined at the time of importation.
  2. Although the Advocate General emphasized the objective market criteria in Tauritus, it is difficult to ignore that in both cases, the adjustments arise from economic considerations. Whether in fuel market settlements or intercompany transactions, such adjustments are common business practices (rather than exceptional situations).

From this perspective, the ruling in Tauritus could impact not only customs valuation practices for certain goods but also the treatment of transfer pricing adjustments in the context of customs law.

Summary

The Advocate General's opinion may represent an important step toward harmonizing customs valuation practices for goods whose prices are subject to subsequent adjustments. A particularly crucial point is the indication that the transaction value method can be applied as long as the price adjustment mechanism is transparent and verifiable.

The upcoming CJEU ruling in this case could have far-reaching implications for customs value adjustments across the European Union.

If you are an importer of goods whose pricing is settled after importation (e.g., based on commodity exchange quotations), it is essential to implement a proper customs process to avoid the risk of import duty arrears and interest. You have the opportunity to take action now! Contact our experts—we are ready to assist you!