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HMRC internal manual

Guidance on the Audit of Customs Values

HM Revenue & Customs
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Treatment of costs of activities taking place in the country of importation


Article 33.1 (b) of the code states:

Provided that they are shown separately, at the time of entry to free circulation, from the price actually paid or payable for the imported goods, the following are not to be included in the customs value:

  • charges for construction, erection, assembly, maintenance or technical assistance, undertaken after importation of imported goods such as industrial plant, machinery or equipment.

Note: WCO EN 6.1 provides a definition of ‘maintenance’

Practical application

When the WCO Technical Committee on Customs Valuation examined this subject it concluded that a listing of activities in the country of importation and their treatment for valuation purposes would not be a useful approach. Such a listing could not be exhaustive and moreover, in many instances, the valuation treatment of any given activity would differ depending on the circumstances of the transaction (WCO Comm 9.1 refers).


The EC Customs Valuation Committee (CVS) considered the purchase of ‘slide films’ from a third country supplier by an importer in the EC.

When the goods are entered to… one indicates the… The two invoice amounts are paid to… The work is performed by a…
free circulation the buyer submits two customs invoices price of the films and the other indicates the cost for developing and framing them. the seller but the development and framing work in only performed after the films have been exposed by the final purchaser. third party on the basis of a special agreement with the seller.

At the time of entry to free circulation it is not known in which country the development and framing work will take place. This depends on to which of the third party’s developing departments the final purchaser chooses to send the film.

The EC CVS concluded that the developing and framing costs are to be considered as charges covered by the provisions of Article 33.1(b) of the Code. Consequently the customs value is to be determined on the basis of the price actually paid or payable for the unexposed films, without including the developing and framing costs (CVS Conclusion 4).

The WCO Technical Committee also concluded that the phrase ‘undertaken after importation’ should be flexibly interpreted as covering activity carried out in the country of importation. In that context, the cost of relevant activities would also be excludible from the value even if they take place prior to the importation so long as they are carried out as part of the installation of the imported goods. An example of this would be a charge for the laying of a concrete foundation undertaken prior to importation of the machinery which is subsequently erected on that foundation.

Where the costs of relevant activities are included in the invoice price of the imported goods and declared as part of the customs value at the time of entry to free circulation, importers may subsequently submit a duty repayment claim based on a request to retrospectively exclude such costs. Claims of this nature are to be rejected following the judgement of the ECJ in Case C-79/89. The Court ruled that, in order to be excluded from the customs value, such costs must be distinguished in the declaration of the customs value from the price actually paid or payable for the goods. That declaration cannot be corrected after the material time for valuation for customs purposes (that is, after the goods have been released for free circulation) (Article 65 of the Code refers). See also paragraph 11.2 (ECJ Case C - 468/03).

EC duties and taxes

Under the provisions of Article 33.1(f) of the Code where import duties or other charges payable in the EC are included in the price paid or payable, these may be deducted from the customs value. Since duties and taxes are by their nature distinguishable from the price actually paid or payable it is not necessary for them to be shown separately on the invoice (WCO Advisory Opinion 3.1 and CVS Commentary 5 refer).

Inspection fees

These are normally payments for quality control checks which the buyer arranges to be carried out on his own account. There is no provision in the law for the addition of these costs to the price paid or payable. Inspection fees should not be confused with Test fees (see GACV06900).