Retroactive TP-adjustments – whether upwards or downwards – Highest German Court rules that they do not have an impact on the customs value.
On 17 May 2022 (published end of September 2022) the German Federal Fiscal Court (or: Bundesfinanzhof. “BFH”) – which is the Highest court for tax related matters in Germany – gave its final judgement in the (in)famous Hamamatsu case. This proceeding is part of the referral to the European Court of Justice (“ECJ”) that resulted in a startling – albeit unclear – decision by the ECJ that retroactive TP-adjustments (whether upwards or downwards) are not to be considered in the determination of the customs value (C-529/16).
Although the plaintiff claimed a duty refund based on retroactive transfer price adjustments by way of a credit note, the BFH stressed that for both, upwards and downwards adjustments, it is unknown at the decisive moment of acceptance of the customs declaration whether the transfer price (which was declared as definitive by the plaintiff on the basis of the transaction valuation methodology) is to be adjusted at all, and if yes, whether the adjustment will be upwards or downwards. Due to such lack of clarity at the time of importation, any adjustments have to be considered irrelevant for customs valuation purposes. Whether or not prices have to be adjusted and to which extent is an incident after the decisive moment for customs valuation purposes and hence has no relevance for the customs value, which shall only reflect the “real economic value” at the time of importation.
Source Baker & McKenzie
See also ECJ – C-529/16 Hamamatsu – Customs valuation and transfer pricing
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