On 15 May 2025, the European Court of Justice (ECJ) delivered a judgement in the Tauritus UAB case, providing guidance for importers who declare goods using provisional prices. The Court confirmed that the transaction value method – the standard for customs valuation – remains applicable even when the final price of the goods is not known at the time of importation, as long as the final price is determined later based on objective, contractually agreed factors such as market prices or exchange rates.
In these situations, importers should use a simplified customs declaration to declare the provisional value at the time of importation, and then submit a supplementary declaration once the final price is established.
Background to the case
The background to the case involves Tauritus, a Lithuanian oil company, which imported fuel under contracts specifying provisional prices to be adjusted later according to market data. Tauritus initially declared these provisional prices to customs, but in several instances failed to update the customs declarations when the final prices became available, resulting in underpayment of import VAT.
Lithuanian customs authorities identified these discrepancies during a post-clearance audit and recalculated the duties owed using the final prices, leading to a legal dispute that reached the ECJ.
Court ruling
The ECJ has clarified that when goods are imported under a contract where the final price is not yet known but can be objectively determined based on pre-agreed, independent factors (such as market prices or exchange rates), the transaction value method remains the primary approach for customs valuation. In these cases, the importer should initially file a simplified customs declaration using the provisional price (as shown on the pro forma invoice). Once the final price is established and reflected in the final invoice, a supplementary declaration must be submitted to update the customs value accordingly. The fact that the final price is unknown at the time of the importation does not, in itself, preclude the use of the transaction value method, provided the final price is based on objective contractual terms.
When only a provisional price is available at the time of importation, it is necessary for the importer to use an incomplete or simplified declaration, which must later be supplemented once the final price is fixed. Regular use of this simplified procedure requires prior authorisation from customs authorities, ensuring that the customs value ultimately declared matches the actual transaction value.
Regarding the relevance of the Hamamatsu case (C-529/16), the ECJ indicated that its findings in Hamamatsu do not directly alter the requirements for determining customs value in the context of provisional pricing based on objective, contractually agreed factors. The Hamamatsu case involved retroactive transfer pricing adjustments within a corporate group, which were determined unilaterally and not strictly according to objective, contractual criteria. The Court suggested that such unilateral adjustments may not always align with the principle that customs value should reflect the real economic value of the goods at the time of the importation. However, in the Hamamatsu case, the ECJ did not categorically exclude all transfer pricing adjustments but rather distinguished the circumstances from those where the final price is determined by objective and independent factors agreed upon in advance.
This judgement is significant for businesses using provisional or intercompany pricing, as it underscores the need for clear, objective contractual mechanisms for price determination and for strict compliance with customs declaration procedures. It also signals that customs authorities may increase scrutiny of customs values that are based on provisional or transfer prices, particularly where the final price is not transparently linked to objective criteria.
What does it mean for businesses?
For businesses, this ruling means that customs authorities are likely to scrutinise customs values based on provisional or intercompany pricing more closely. It is essential for importers to ensure that customs declarations are updated to reflect final prices and that the correct procedures for simplified and supplementary declarations are followed. The decision does not alter the rules for transfer pricing adjustments unless those adjustments are based on objective and contractually agreed factors.
Importers should review their contracts to ensure that any provisional pricing is clearly linked to objective and verifiable criteria, and establish processes to update customs declarations promptly when final prices are determined. If simplified declarations are used regularly, prior authorisation from customs authorities is required. Businesses should also monitor how local customs authorities implement this ruling and adjust their compliance practices accordingly.
How can PwC support you?
PwC offers comprehensive services to help businesses navigate the complexities of global trade.
Our transfer pricing and customs experts can provide assistance and guidance to your company on the use of transfer prices as a basis for their customs valuation.
As part of this service, we assess whether and how these transfer prices can provide an acceptable basis for the customs value and determine whether it is advisable or even necessary to coordinate them with the customs authorities.
We also support companies with the practical implementation of the simplified declaration process in the EU.
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