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A year-end adjustment, may require more adjusting than you think

A year-end adjustment, may require more adjusting

It’s time to determine which payments should be included in the customs value of imported goods.

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Leonie Ferretter

Partner, Trade & Customs

KPMG Australia

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As our December year-end clients focus on ensuring all of the Australian Taxation Office’s strict deadlines are met, it is also important to meet any legislative requirements under the Australian Customs laws.

The Department of Home Affairs has recently re-issued its guidance on the voluntary disclosure of post-importation adjustments through its enforcement agency, Australian Border Force (Customs). Importantly, Customs has reiterated that an obligation arises on an importer to disclose any goods-related transfer pricing adjustments as soon as the importer becomes aware of them, and in line with financial reporting obligations.

Under Australian customs law, it is also a legal requirement to disclose certain other payments/costs that are not included in the customs value of the goods at the time of importation.

These may include, but are not limited to:

  • royalties and license fees
  • research and development costs
  • certain commissions
  • proceeds of reselling the goods, and
  • any other goods-related payments.

Disclosures are required whether there is an upward or downward adjustment to the price of the goods, and whether or not there is a change in the customs duty liability, including where goods are duty-free.

Under Australia’s customs self-assessment regime, it is incumbent on importers to determine which payments are required to be included in the customs value (either at the time of importation or when those payments arise). Non-disclosure of adjustments to the price of the goods can result in infringement notices and penalties being issued.

To read more on how you can manage your compliance obligations, please log on to KPMG Tax Now.

Please register for KPMG Tax Now if you're yet to do so. 

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