Where goods are imported into the EU, the valuation for customs duty, and subsequently import VAT purposes, is usually the commercial sales price paid by the importer. However, importers have been able to take advantage of the so called ‘first sale for export’ method which allows them to use a lower sales value declared outside the EU prior to the purchase by the importer (note that the preceding lower price can only be used where it is known the goods are destined for export). This has therefore allowed the importer to reduce the customs duty and import VAT payable.
Under EU proposals, the use of this method would no longer be possible meaning that the valuation must always be based upon the commercial price paid by the importer, therefore increasing costs. The proposal is currently in ‘draft’ stage so the first sale for export method may still be used until such a time that the relevant EU legislation is passed.