Summary

Economic globalization is a process characterized by worldwide increases in trade flows and a growing interdependence between national economies and technological developments (certainly in the transport sector). As part of this process, the nature of trade, too, has evolved, with trade relationships now more intensively based on inter-firm transactions, and businesses and production processes no longer being tied to a traditional, home-state base, but instead being highly international. Meanwhile the value of goods is increasingly being determined by intangible rights such as royalties. These developments have been accompanied by a gradual phasing-out of protectionist or other trade barriers, as illustrated by the increasing number of freeports, free trade zones and free trade agreements in recent decades. Nevertheless, one internationally accepted barrier to trade – the imposition of import duties – continues to be widely applied. Moreover, import duties have recently attracted renewed attention in response, for example, to the United Kingdom’s departure from the European Union (‘Brexit’) and the re-emergence of protectionism (‘neo-protectionism’) in the form of the trade measures introduced by the Trump Administration and the retaliatory measures announced inter alia by China and the European Union.

Before import duties can be calculated, the basis for calculating them has to be determined. In principle, import duty calculations are based on the customs value, which is determined in 90-95% of cases on the basis of the transaction value. According to the internationally accepted Customs Valuation Agreement (CVA) of the World Trade Organization (WTO), this is the primary method used to determine customs values. As a WTO member, the European Union is obliged to incorporate the CVA into its customs legislation, and has done so in the form of the Union Customs Code (UCC). However, the worldwide developments referred to above mean the use of the transaction value for determining customs values is coming under pressure. This is because this internationally accepted system for determining customs values reflects the economic reality of the 1970s and seems to be of only limited use for determining customs values in successive sales (i.e. which sales transaction is relevant?), inter-firm transactions (i.e. how should customs authorities ensure that values have not been influenced by inter-firm relationships?) and when the value of imported goods is accounted for, at least partially, by intangibles (i.e. how should these price elements be valued?). This research examines how the transaction value method should be used to establish the customs values of imported goods in the presence of the above-mentioned pressure.

This research considers the pressure that has built up regarding the use of the transaction value as a method for determining the customs values of imported goods and examines this from a European law perspective. The reason for focusing on the transaction value of imported goods can be explained, on the one hand, by the fact that 90-95% of customs values are determined on the basis of imported goods’ transaction value and, on the other hand, because the pressure attributable to economic globalization is less intense in situations where alternative valuation methods are used. Various aspects can be distinguished when examining the pressure that has built up on the use of imported goods’ transaction value for determining customs values. The aspects examined in this research are as follows:

1. Determining the transaction value in the event of successive transactions

It is usual in the case of international goods flows for more than one transaction to occur before the goods are declared for import, even after they have left the exporting country. The transaction qualifying as the ‘sale for export’ then has to be established. This immediately raises the question as to the scope of the term ‘sale’, given that if no sale can be identified from a customs law perspective, the customs value will have to be determined using one of the alternative methods.

If more than one transaction can be designated as a ‘sale for export’, it is important – for a variety of reasons – to establish which of these should be used for determining the customs value. Firstly, this may have implications for how the customs value is determined. These implications may differ, depending on whether a transaction was effected between related or unrelated parties: if a transaction between related parties is nominated for use in determining the customs value, it will have to be demonstrated that the price was not influenced by the parties’ relationship. If this cannot be demonstrated, an alternative valuation method will have to be used as the basis for determining the customs value. Secondly, the transaction selected also has financial implications, given that an earlier transaction in the chain will generally result in a lower basis being used to calculate the customs value and potentially, therefore, in lower import duties being due.

When determining the transaction value in successive sales, the UCC has opted to apply the ‘last-sale’principle, whereby the customs value has to be based on the sale immediately before the goods were brought into the EU customs territory. The way in which this concept is applied, both in theory and practice, would seem to need some refinement if it is to function optimally. Another question is whether the determination of the last-sale concept is in accordance with the CVA. This was certainly not the case when the European Commission’s guidance used the concept of the ‘domestic sale’, which lacked any underlying basis in law. Put briefly, a domestic sale between two parties established in the European Union was not classified as a sale for export under the last-saleprinciple. In other words, the introduction of this concept, which has since been discontinued, meant that parties’ place of establishment was the determining factor for identifying the relevant sale for export in the event of successive sales, whereas it follows from earlier Court of Justice case law that the place in which parties to a sale are established should not prevent a transaction qualifying as a sale for export.

2. Applying the transaction value in the event of affiliated parties

In recent years, economic globalization and the accompanying intensification of inter-firm trade relationships and transactions have substantially changed the international trade environment. At the same time, the way in which internal transfer prices are arrived at has increasingly been attracting attention, both in day-to-day practice and in academia. And while the extent to which transfer pricing affects customs values previously tended to be rather overshadowed, it is now attracting growing interest.

The importance of this latter aspect is reflected in the fact that one of the conditions for using the transaction value method in cases involving related parties is that the price paid or payable for the imported goods must not be influenced by the parties’ relationship. From a customs law perspective, the concept of related parties essentially means the existence of a group or family relationship between two parties or that one of the two parties has a decisive influence on or effective control of the other. In practice, transfer pricing documentation is often used to demonstrate that a price has not been influenced by such a relationship. This is becoming increasingly common now that more and more transactions are based on the inter-firm principle (in other words, intragroup transactions now represent an increasing share of the total).

However, the use of transfer pricing analyses is not uncontroversial, even though the World Customs Organization (WCO) sought to promote such analyses internationally in its Guide to Customs Valuation and Transfer Pricing report of June 2015 (updated in 2018). This also applies to retroactive transfer pricing adjustments and their influence on customs values. These aspects reflect the differences between the purposes, legislative sources, valuation methods and components used to determine customs values and those applying to transfer prices. At the same time, a certain degree of influence was and indeed still is assumed to exist between internal transfer prices and customs values, given that both are determined on the basis of arm’s length pricing set by related parties.

The EU member states have nevertheless so far failed to achieve consensus on the extent to which transfer pricing and retroactive transfer pricing adjustments influence the customs values determined. The Court of Justice’s judgment in Hamamatsu Photonics Deutschland GmbH v. Hauptzollamt München would not seem to have helped achieve consensus on the use of transfer pricing documentation and on taking transfer pricing adjustments into account when determining customs values. At the same time, the UCC legal package, including the guidance issued by the European Commission, does not provide for legislation to this effect. Similarly, BEPS Action 13 on transfer pricing documentation and country-by-country reporting provides no guidance on greater harmonization in how customs values and transfer prices are determined, even though transfer pricing documentation can contain information that is useful for determining customs values. Thanks to increasing interconnectivity between tax authorities and customs authorities, the improved insight that this documentation provides has potentially strengthened customs authorities’ position from an enforcement perspective. This interconnectivity has also been encouraged by legislation on administrative assistance in VAT, which aims inter alia to promote closer cooperation between tax and customs authorities.

The financial consequences that transfer pricing and retroactive transfer pricing adjustments can have for the amounts of import duties due, and the legal uncertainty these aspects can create, clearly highlight the importance of investigating the relationship between retroactive transfer pricing adjustments and the determining of customs values. A greater understanding of this relationship will create opportunities for advance coordination and, therefore, for achieving legal certainty and saving time. It may also mean that customs authorities view taking retroactive transfer price adjustments into account in the final determination of a customs value as a finable or punishable offence.

3. Determining transaction value elements

The transaction value of imported goods is based on the price charged for the sale of the goods. This valuation method is based on a subjective approach, but partially objectified in order to avoid goods being undervalued. To ensure that the customs value reflects the imported goods’ economic value, the UCC, like the CVA, contains a limitative list of elements that should be included in the price paid or payable.

Various academic publications and legal cases have shown that legislation and practice are not always aligned, particularly in respect of elements designated for customs purposes as commissions, assists, royalties or licence fees. This lack of alignment is attributable to the substantial difference between the economic reality at the time of the customs valuation provisions being established and today’s economic reality. As well as the far greater numbers of intragroup transactions driving today’s more intensified trade relationships, the restructuring of tax and operating models means centralised management of business processes has now become the norm. These developments have resulted in more and more buyers of imported goods supplying goods and services free of charge or at a reduced price so that these can then be used in the production and sale for export of the imported goods. In each such case, various conditions have to be applied in order to decide whether the value of these goods and services supplied should be included when determining the transaction value of the imported goods, with the aim being to avoid goods being undervalued. However, the conditions applied do not always seem to reflect the contractual arrangements’ complexity, the extent to which parties influence and exert effective control over each other, or the financial flows between parties.

As mentioned earlier, the customs value should reflect the economic value of the goods at the time they are declared for import. This value is increasingly influenced by the buyer’s ‘experience’ of the value that they represent. Customs values are therefore no longer determined solely by payments for tangible goods, but also by the value of the inextricably linked intangibles. If, therefore, the value of these intangibles is expressed in the form of a royalty or licence fee payment, this amount has to be taken into account, under certain conditions, when determining the customs value. The EU law provisions on these conditions were amended on 1 May 2016, when the UCC came into force. As well as the UCC no longer defining royalties and licence fees, the conditions in which royalties and licence fees have to be included in the price actually paid or payable now seem to be met more readily. This in turn means that payments for royalties and licence fees are more likely to be taxed, and, therefore, that higher import duties may consequently become due. However, the exact significance of these ‘more readily met’ conditions is not entirely clear, while the question of the extent to which they align with the conditions set out in the CVA also has to be considered.

In the case of commissions, assists, royalties and licence fees, the influence and effective control exercised by one party on the other can be the factor determining whether the value of these elements has to be added to the price paid or payable for imported goods. BEPS Actions 8-10 and 13 affect the extent of influence that parties within a group have on each other, and this may affect whether and to what extent these elements have to be included when determining customs values.

Where successive sales are made before the goods physically reach the customs territory of the importing country, it has to be determined which sales transaction should be used as the basis for calculating the customs value. A distinction can be made in this respect between the ‘first-sale’ and the ‘last-sale’ principle. If the former is applied, the customs value may be determined on the basis of a first or earlier sale, providing this sale qualifies as a sale for export. If the latter principle is applied, the latest sale is used as the basis for determining the customs value. The UCC has opted to apply the last sale for export, as set out in Article 128(1) of the Implementing Act UCC (IA UCC).

The ‘last-sale’ principle as applied in Article 128(1), IA UCC establishes that, for customs valuation purposes, the determining sale is the sale occurring immediately before the goods were brought into the customs territory. Here, the important issue is the scope of the term ‘sale for export’. As I see it, a ‘sale for export’ needs at least to entail the transfer of financial risk. Consequently, sales orders (or special forms of such orders) should not generally be regarded as constituting a sale for export. In the absence of a sale for export, the customs value will have to be determined using an alternative valuation method. The situation described in Article 128(2), IA UCC represents an exception to this rule: if goods are not sold for export, but instead placed in temporary storage or held under a special procedure after being brought into the customs territory, the customs value can still be determined on the basis of the transaction value, but the latter will then be determined on the basis of the sale occurring while the goods are in temporary storage or held under a special procedure. If more than one sale occurs, economic operators should be free, for the sake of simplicity in the customs valuation system, to select the sale to be used for this purpose. In its Guidance Document on Customs Valuation of 17 September 2020, however, the European Commission has opted to use the sale closest as possible to the moment at which the goods to be valued entered the relevant customs territory physically.

The former Guidance Document on Customs Valuation, published by the European Commission when the UCC legal package came into force, introduced the concept of the ‘domestic sale’, whereby a sale between a buyer and a seller who are both established in the European Union does not qualify as a sale for export. As well, however, as this view is not aligning with Court of Justice case law, no legal basis for it is provided in the UCC legal package. As a result, the concept of the ‘domestic sale’ ceased to be used upon publication of the revised version of the Guidance Document on Customs Valuation.

Although the UCC legal package has chosen to apply the last-sale principle, the CVA does not explicitly indicate whether transaction values determined for imported goods in a series of sales should be based on the first- or the last-saleprinciple. Which of these two principles should prevail consequently has to be decided on the basis of the elements in the assessment framework. In certain respects, therefore, both the first- and the last-saleprinciple will fail to align with the basic assumptions underlying the CVA. In certain cases, the last-sale principle would seem to constitute a non-tariff barrier if the importer does not have access to the required administrative data because of not being involved in the last sale as a buyer or seller. However, application of the first-sale principle may result in the transaction value not conforming to the actual value of the imported goods because of certain elements not being added in. This divergence from the basic assumptions in the CVA would seem more important than the possible increase in administration that would result from applying the last-sale principle. It would seem slightly preferable, therefore, to use the last-sale rather than the first-saleprinciple. This would also have the benefit of promoting greater uniformity, given that, since the publication of Commentary 22.1, almost all WTO countries now use the last-saleprinciple.

But although, following on from the above interpretation of the CVA, the UCC legal package, too, aligns with the last-saleprinciple, the manner in which this principle has been enshrined in this package is legally untenable, given that, in my view, the European Commission has in this respect exceeded its implementing powers. The provisions in the UCC legal package consequently need to be amended, and I recommend introducing the concept of the ‘buyer in the EU’, as discussed in more detail below.

In principle, customs values are determined on the basis of imported goods’ transaction values. However, use of these transaction values is subject to various conditions, one of which is that if a price has been established between related parties, this price can only be taken as the transaction value if it has not been influenced by the parties’ relationship. In the event of any doubts as to whether this relationship has influenced the price, customs authorities will allow the declarant to provide further information. Either the declarant will then demonstrate, to the customs authorities’ satisfaction and following an investigation of the circumstances surrounding the sale, that the price has not been influenced by the parties being related, or the declarant will have to demonstrate that the transaction value declared closely approximates one of the test values. The strict conditions set for these test values mean, however, that declarants will often be unable in practice to demonstrate this, with the result that the only way to demonstrate that the price was not influenced by the parties’ relationship will be through an investigation of the circumstances surrounding the sale.

Although it is not made specifically clear which information has to be provided in order to remove doubts on whether the transaction value declared was influenced by the parties’ relationship, it follows from point 3 in the Note to Article 1(2), CVA that this information must show how the buyer and the seller have structured their commercial relations and how the price in question was arrived at. This Note provides three examples of circumstances that would demonstrate that the price has not been influenced by parties’ relationship.

It is common practice to use transfer pricing documentation to show the circumstances surrounding the sale and in seeking to answer the above questions. This documentation will explain how arm’s length prices were arrived at for transactions between affiliated parties in order to ensure a fair division of profits for profit tax purposes. The objective, both when determining transfer prices and determining transaction values in transactions between affiliated parties, is to arrive at a price that would also have been agreed in a transaction between independent third parties. However, the determining of transfer prices differs from that of customs values: they have different backgrounds, as well as differing comparative analyses and pricing methods – internal transfer prices can be determined at an aggregated level, whereas transaction values are set at a transaction or product level – and they also handle price adjustments differently. In practice, however, these differences are increasingly able to be bridged, particularly because developments in technology now mean economic operators can set transfer prices at both a product and transaction level.

Despite these differences, it is preferable from an assessment framework perspective for internal transfer prices and transaction values to be aligned as far as possible, given that both are intended to be based on arm’s length pricing. Eliminating such differences would also reduce the risk of arbitrary and fictitious customs values being set, and would thus safeguard system neutrality. Additionally, greater harmonization would simplify the process of determining internal transfer prices and customs values, as well as according with existing trade practices, where economic operators already use transfer pricing documentation to demonstrate that a transaction value has not been influenced by parties’ relationship. Lastly, it would reduce the chances of customs authorities retrospectively disputing transaction values declared and then imposing additional assessments or possible sanctions. In that way, therefore, harmonization would also result in a fairer system. In my view, it would also mean that internal transfer pricing adjustments would also have to be taken into account for final determination of customs values because this would ensure that the transaction value of the imported goods reflected their economic value. This would all be subject to the conditions that the internal transfer pricing adjustment pertains to the imported goods and influences the actually paid or payable price and that the adjustment occurs within the statutory period.

No binding provisions exist in either international or European law regarding the extent to which transfer pricing documentation can be used to demonstrate that prices have not been influenced by a relationship and outlining how to deal with internal transfer pricing adjustments in the final determination of customs values. However, various non-legally binding instruments provided by the WCO Technical Committee on Customs Valuation give some indication of the extent to which such documentation can be used. These include Commentary 23.1, the Guide to Customs Valuation and Transfer Pricing and Case Study 14.1, which show that transfer pricing analyses can be useful for determining whether prices have been influenced by an affiliated relationship, even when such analyses are based on a transactional profit method. The Guide to Customs Valuation and Transfer Pricing also indicates that the CVA’s statutory framework makes provision for internal transfer pricing adjustments to be taken into account for final determination of customs values. However, no final decision has been taken on whether and when to take such adjustments into account. Canada, the United States and South Korea have all also adopted policy or issued statutory provisions on when and how internal transfer pricing and transfer pricing adjustments can or should be taken into account for final determination of customs values. The European Union, by contrast, has not included any policy or statutory provisions in the UCC legal package to indicate how these items can or should be taken into account. Admittedly the Court of Justice has issued various judgments under Regulation (EEC) No. 803/68, but these would no longer seem applicable, given that this regulation determines customs values on the basis of the theoretical value rather than the positive value. And while there have also been various cases on this subject in national law, these show that the judiciaries in the EU member states all have differing views. In December 2017, for example, the Court of Justice ruled in the now infamous case of Hamamatsu Photonics Deutschland GmbH v. Hauptzollamt München that the customs value cannot be based partly on an agreed transaction value consisting of an amount initially invoiced and declared and partly on a flat-rate adjustment made after the end of the accounting period, without it being possible to know at the end of the accounting period whether this adjustment would be upwards or downwards. This judgment can be interpreted in various ways and would seem to offer scope for using internal transfer pricing documentation to demonstrate that prices have not been influenced by parties’ relationship. However, retroactively taking account of internal transfer pricing adjustments for final determination of the customs value after a normal import declaration has been submitted would not seem possible, given the lack of a statutory basis.

In the event of a normal import declaration being submitted, the UCC legal package would not currently seem to allow retroactive internal transfer pricing adjustments to be taken into account. This is possible, however, in the event of a simplified declaration, even though no policy currently exists on taking such retroactive adjustments into account. Another simplification in the form of flat-rate determination (as authorised under Article 73) can be applied if the price actually paid or payable or the price elements referred to in Articles 71 and 72 UCC are not quantifiable. However, authorisation under Article 73 would seem to be applicable only in very exceptional circumstances as far as customs values determined on the basis of internal transfer prices are concerned. Lastly, the UCC legal package makes provision, through a binding value information (BVI) decision, to obtain advance certainty on how transaction values can be determined on the basis of internal transfer prices. If, however, this option is to be used, it would seem necessary for certain provisions to this effect to be included in the Delegated Act UCC (DA UCC) and IA UCC, given that these agreements currently seem to prevent local customs authorities in EU member states from issuing a BVI. Recommendations for more effectively aligning prices of intragroup transactions from a customs value and transfer pricing perspective are set out below.

The system for determining transaction values is a closed system; in other words, the transaction value is determined on the basis of the price actually paid or payable, and other price elements must only be added or may only be deducted for the purposes of determining the transaction value if statutory provision for such addition or deduction is made. The elements that have to be added, under certain conditions, are set out in Article 71 UCC and are as follows:

The elements that may be deducted are set out in Article 72 UCC and are as follows:

Each of these elements has its own sphere of application and there is no overlap between the different elements. Therefore, if a payment classified as a royalty or licence fee does not comply with the conditions for being added under that heading, it cannot be added under any of the other categories. But although the different categories do not overlap, it can in practice be difficult to distinguish between different price elements. To establish the exact scope of the various categories, this research examined certain elements in pari materia (i.e. as being construed together). This revealed that, in certain circumstances, the provisions in the CCC and/or UCC legal package define price elements too broadly or too narrowly and/or that the Court of Justice interprets provisions too widely or too restrictively, with the result that certain price elements are incorrectly taxed or incorrectly remain untaxed. The question also arises, mainly in respect of intangibles, as to which category certain elements should be assigned to. This adversely impacts on the fairness and equity of the customs valuation system and on the requirement for customs valuation provisions to be carefully worded. The conditions for including or excluding price elements when determining customs values need to be clear to customs authorities and importers alike. This research found, however, that these conditions are not always clear. This consequently created tension between the conditions and the assessment framework. By subjecting all the price elements to an integrated examination against the statutory provisions, the instruments of the Customs Expert Group (Valuation Section) and the WCO Technical Committee on Customs Valuation (TCCV) and with reference to examples, I have sought to provide insight into how the conditions on which transaction values include or exclude elements should be interpreted in an era of economic globalization.

The most significant findings were as follows:

This research examines the extent to which the transaction value can be used as the basis for valuing imported goods in the European Union for customs purposes at the current juncture and in view of the objective that has been set for the customs valuation system. I found that the way the customs value is determined is not always in line with the elements in the assessment framework. The impact of the provisions in the UCC legal package, for example, is not always fair, uniform and neutral, as shown, for instance, in the imprecise and, therefore, unfair wording of Article 128 IA, UCC, from which the last-sale principle applied in the European Union follows. In certain circumstances this principle can result in the importer not being involved in the sale transaction used as the basis for determining the customs value. Not having the underlying documentation pertaining to the transaction can then (unintentionally) result in an alternative method having to be used to determine the customs value. This also makes the system less straightforward. In my opinion, Article 136(4)(c), IA UCC, too, has been drafted imprecisely as its wording suggests a ‘catch-all’provision for including payments for royalties and licence fees to third-party licensors, whereas this would not appear to be the intention, at least not according to the European Commission’s Guidance Document on Customs Valuation. As such, therefore, the provision is unfair and may result – albeit unintentionally – in customs values being set too high and, therefore, on an arbitrary or fictitious basis.

The uniformity of the customs valuation provisions in the UCC legal package (i.e. their uniform application by EU member states) is also under pressure, as demonstrated, for example, by the differing ways in which member states deal with the including or excluding of internal transfer prices and transfer pricing adjustments in the determination (or final determination) of customs values.

Furthermore, the UCC legal package does not always safeguard system neutrality, given that, in certain circumstances, the scope of the price elements in the transaction value contains a degree of overlap, whereas each price element should, in my view, have its own scope and its own set of conditions to meet for inclusion or exclusion purposes. Examples include buying commissions, which are in certain circumstances – incorrectly, in my view – classified as transport costs. As I see it, the neutrality of the system is also impaired by internal transfer prices not automatically being included in transactions arising from an intragroup transaction. This increases the likelihood of arbitrary and fictitious customs values. I found nothing in the UCC legal package to indicate that customs values are being used to combat dumping practices.

In short, this research has demonstrated that using the transaction value of imported goods as a method for determining customs values has come under pressure as a result of economic globalization and that this has implications, particularly when determining the transaction value of imported goods in a series of sales (chapter 9) and intragroup transactions (chapter 10) and when determining the price elements to be included in the transaction value of imported goods (chapter 11). Ways in which this pressure can be reduced with regard to topics being discussed in chapters 9 and 10 are set out below in the form of recommendations.

The last-sale principle is applied not only in the European Union, but also, for example, in Australia, Canada and Japan. Although each of these countries applies the principle differently, they have in common the fact that they target the sale that brought the goods to the importing country and that, wherever possible, they seek to avoid price mark-ups between parties that are both resident in the importing country from being included in the customs value. Each of these countries has provided inspiration for the wording of a recommendation designed to ensure that the last-sale principle in the UCC legal package operates more effectively. The ‘purchaser in Canada’ requirement would seem an appropriate blueprint in this respect, given that Australia and Japan have embodied the last-saleprinciple into their legislation in a manner that would seem a less feasible option for the EU. This is because the ‘import sales transaction’, as applied by Australia, differs from the ‘sale for export’ principle in the CVA and would thus introduce a new criterion without any legal basis in the CVA. And although Japan, like Canada, has introduced an establishment criterion, it does not apply the transaction value of the imported goods in the absence of a seller established in Japan. This means that if a sale for export to Japan takes place between two parties not established in Japan, the transaction value of the imported goods will not be used, and the customs value will consequently have to be determined using an alternative valuation method. This would create tension by being at odds with the assessment framework, where the transaction value is intended to be used, wherever possible, as the basis for determining the customs value.

This research presents a proposal for an alternative system, based on the blueprint of the ‘purchaser in Canada’ requirement. It includes a proposal to add an establishment criterion to the UCC legal package so as to avoid the European Union exceeding its implementation powers, as is currently the case. Accordingly, this establishment criterion should be incorporated into the UCC instead of the DA UCC or IA UCC. In my view, that would require the underlined words being added to Article 70(1), UCC:

Article 5 contains definitions of terms used in the UCC. A new paragraph, possibly worded as follows, should be added to provide a definition of the term ‘buyer in the European Union’:

Introducing the concept of the ‘buyer in the European Union’ will ensure that the customs value determined aligns with the last-sale principle, while also simultaneously preventing profit relating to activities performed and risk undertaken in the European Union from being included in customs duties.

For political reasons, it would not seem feasible to seek to harmonize internal transfer prices and the transaction values in intragroup transactions by amending the OECD guidance or the CVA. Harmonization can be achieved without amending the CVA and OECD guidance. At a European law level, the customs values determined on internal transfer prices can be harmonized by amending certain points within the scope of the CVA and, where necessary, drafting policy to ensure that customs law provisions are interpreted uniformly. In summary, the following recommendations are made: