Valuation

In order to determine whether an importation can be valued under the Transaction Value method, the following requirements must be met.

  1. The goods were sold for export to Canada and the price can be established.

  2. If there is a relationship between the purchaser and the vendor, it can be demonstrated that the price paid or payable for the goods was not influenced by that relationship.

  3. There are no limitations on the sale such as restrictions, conditions or unknown subsequent proceeds.

The transaction value is calculated in the following manner taking into account the adjustments provided in subsection 48(5) of the Customs Act.

  1. Price paid or payable for the goods including all direct and indirect payments to the vendor or for his benefit – this includes all charges from the vendor such as sample surcharges.

  2. Required additions, if applicable (if not already included in (a) above):

    1. Commissions incurred by the purchaser (selling commissions only)

    2. Packing costs (domestic and export packing)

    3. The value of assists i.e., goods or services supplied free or at a reduced cost by the purchaser for use in connection with the production and sale for export of the imported goods

    4. Royalties and licence fees related to the sale of the goods

    5. Subsequent proceeds, accruing to the vendor

    6. Transportation, insurance and associated costs up to and at the point of direct shipment

  3. Allowable deductions, if applicable (if included in (a) above).
    Note: The importer must possess evidence to support these deductions.

    1. Transportation, cartage, insurance and associated costs from the point of direct shipment

    2. Construction, erection, assembly costs, etc., after importation

    3. Import duties and taxes

    4. Customs brokerage fees

    5. Import permit fees

Notes

  1. Trade discounts are normally deducted, but cash discounts are only deducted if the importer takes advantage of them.

  2. Discounts applicable to previous transactions are not deductible.

  3. Buying commissions and quota payments are not added to the value, but if included in the price, cannot be deducted. Selling commissions are added to the value.

Alternate Valuation Methods
If the Transaction Value Method may not be used, the following alternate valuation methods must be considered in this order.

  1. Transaction value of identical goods

  2.   Transaction value of similar goods

  3.   Computed value

  4.   Deductive value (Computed and Deductive methods may be reversed)

  5.   Residual value

Customs valuation handbook
How to establish the value for duty of imported goods