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HMRC internal manual

Guidance on the Audit of Customs Values

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HM Revenue & Customs
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Branch offices: practical application of Method 6

In cases where there is a transaction value for the imported goods which is used as the basis for settlement between the Branch and its Head Office, this transfer value should be examined in the same way as a transfer price between related parties. Thus the aim should be to ensure that the transfer value equates to an ‘arm’s length’ price and it is not influenced by the relationship between the Head Office and its Branch.

Where the importer can demonstrate that the Head Office is trading with its Branch on the same terms as it would trade with an unrelated customer operating at the same commercial level and purchasing in the same quantities, the intracompany transfer value may be used as the basis for determining the customs value under Method 6.

This approach is considered to be consistent with the principles and general provisions of the WTO Valuation Agreement. For administrative purposes it is regarded as the application of Method 1 flexibly.