The Main Method and Six Ways to Determine Value

Under the main method, customs value starts with the price actually paid or payable for the imported goods, with adjustments expressly provided for by Article 58 of the Customs Code. This method applies where the conditions established by the Code are met and numerically determined data are supported by documents. For an ordinary commercial purchase, it is the method closest to the actual economics of the contract.

If the conditions for the main method are not met, the Code provides secondary methods: the transaction value of identical goods, the transaction value of similar goods, the deductive value method, the computed value method and the fallback method. The sequence and grounds for moving between methods are determined by the Customs Code. For the owner, the final figure matters because it affects customs duty, import VAT and the full cost of the shipment.

Before entering into a large contract, several Incoterms terms, delivery options and insurance arrangements can be compared. The supplier's price by itself shows only part of the future costs. A full calculation makes it possible to choose the shipment size, logistics and selling price in Ukraine before paying for the goods.

Contract, Invoice and Components of Customs Value

Article 53 of the Customs Code lists the main documents for the declared customs value: a customs value declaration in the prescribed cases, the foreign trade agreement, invoice, payment documents where payment has been made, other accounting materials, transport documents and information on transport cost, an import licence in the relevant cases, and insurance documents.

Transport to the place of import, insurance, loading and other components provided by law are added to the price under the rules of Article 58 if they are not already included in the contract price. EXW, FCA, FOB or CIF terms allocate costs between the parties differently, so the same price of goods may result in a different customs value.

A supplier discount, commission, royalty, payment to a third party or separate materials supplied by the buyer should be clear from the contracts and calculations. For regular shipments, a cost table is useful: goods, delivery, insurance, duty, VAT, broker, warehouse and other expenses. The accountant sees the actual amounts, while the director sees the margin on each shipment.

Additional Documents and Adjustments

Where documents contain discrepancies, signs of forgery, or lack information about the numerical components of value or the price actually paid, the customs authority may request additional documents in writing under Article 53. The declarant has 10 calendar days to provide the available materials from the list set out in the Code. The customs authority works specifically with the documents named in this article.

If a value adjustment decision is made, the importer sees the grounds, numerical calculation and amount of additional payments. Under Article 55, the goods may be released against security for payment of the difference, and within 80 days from the date of release the declarant has the right to submit additional documents confirming the declared value. After they are submitted, the customs authority makes a written decision within 5 working days.

UBC can review the contract, method, price components and documents for a specific shipment. The client receives a numerical calculation of the import cost and a document package that can be used together with the broker, accountant and customs authority.

For repeat shipments, it is useful to keep the same calculation structure: invoice price, separate costs, exchange rate, declared customs value and amount of payments. The next shipment can then be calculated using the same clear items.