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HMRC internal manual

Guidance on the Audit of Customs Values

Exclusions from the customs value: distributors/concessionaires discounts

These are normally trade discounts. A distributor or concessionaire is usually not related to the seller but does have an agreement restricting the supplier from selling to anyone else in a given geographical area (see WCO EN 4.1 and Case Study 9.1).

The supplier often aids the distributor or concessionaire by supplying advertising material, technical advice on marketing or allowing large discounts. Such arrangements, although they usually benefit both parties, do not prevent the transaction value between the seller and the distributor or concessionaire from being accepted under Method 1.

Payments for sole distribution rights are usually covered by an agreement between the buyer and seller. Where the contractual arrangements indicate that such payments are made as a condition of the sale of the goods, they are to be included in the customs value.