Transaction Value
Meaning ~ Valuation logic determining duty based on the actual price paid between buyer and seller, incorporating specific additions like royalties, packing, and assists.
Buying Commissions Exclusion
Meaning
Customs valuation regulations permit the deduction of fees paid to an agent acting solely on behalf of the importer from the transaction value of imported merchandise. Under the buying commissions exclusion, these fees are not subject to duty if the relationship between the buyer and the agent is documented by a written agency agreement. The separation of these charges must be clear on the commercial invoice or through proof of payment to the agent.
This rule holds across major trading nations.
Valuation Impact
Deductible fees must be separated from the price actually paid or payable for the imported goods. Importers use this method to lower the overall duty liability on large shipments. This treatment applies across multiple jurisdictions, but it requires that the agent has no ownership stake in the exporting entity.
Legal Standard
Importers must provide a signed agency agreement to the customs authority upon request to prove that the agent worked for the buyer and not the seller. If the agent controls the supplier or shares profits, the agency relationship is void. This requirement means that the burden of proof rests entirely on the importing company.
Risk Control
Auditors regularly check commissions to ensure they are not hidden selling costs. False claims can lead to substantial financial penalties and retroactive duty bills. A simple test of agent independence is whether they can negotiate with multiple manufacturers to secure the best deal.