The Court of Justice of the European Union (CJEU) issued a judgment providing some clarity about the impact of retroactive transfer pricing adjustments on the customs valuation of goods imported into the European Union.
The case is: Hamamatsu Photonics Deutschland (C-529/16, 20 December 2017)
The CJEU found that if the initial transfer price could be subject to retroactive adjustments, it cannot be used for customs valuation purposes. As a result, the customs valuation of goods imported by companies applying a transfer price that allows for retroactive adjustments cannot be based on the transaction value method. Accordingly, one of the other customs valuation methods must be used. However, these methods are widely considered to be much more cumbersome in their practical application. The CJEU judgment could thus have far-reaching consequences for EU importers. Still, the practical implications of the CJEU judgment will likely vary significantly for each EU Member State.
Read a January 2018 report prepared by the KPMG member firm in the Netherlands
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.