Product licensing as part of customs value

17 November 2016

Earlier this year we informed you about new customs legislation concerning royalties and license fees (read here). This differs quite a lot from the previous legislation. In many cases, these costs must now be included in the customs valuation. This is important to you, because it impacts on the level of import duties. 

The past few months have shown that the new customs legislation poses some problems in terms of its interpretation. Royalties and licensing of products are often complex in themselves. Therefore, uncertainty has prevailed among importers as to whether the new customs legislation is applicable to them. In addition, the way in which royalties and license fees are tallied is not always entirely clear. That’s why we are happy to provide you with some additional explanation of this.

Check, check and double check

Previously, royalties and license fees could often be left out when calculating the customs value. This was, for example, arranged via various regulatory or contractual clauses. In many cases this is now different.

Unsure as to whether you have to incorporate licences and royalties? The national assessment team or an accountancy bureau specialised in royalties and licences can tell you. We advise you, if in any doubt, to make contact with them.

Licensed goods mentioned on the invoice

Our claims department regularly receives invoices with items where licensing could possibly apply. It is important to always mention somewhere on the invoice if there are licensed goods, for example, by including this in the description. If this is not done, then the royalties and license fees are inadvertently not included in the customs value. This makes the declaration incorrect.

Natuurlijk kan het zo zijn dat u al een regeling heeft getroffen en dat u achteraf (periodiek) opgave doet en invoerrechten afdraagt. In dat geval verzoeken wij u om dit aan ons door te geven, zodat wij hiervan een melding kunnen maken in de aangifte. Als aangever/importeur is het te allen tijde uw verantwoordelijkheid om de juiste gegevens aan de douane declarant te verstrekken.

Of course it may be that you have already made arrangements and that you do declarations (periodically) afterwards and pay import duties. In this case we ask you to provide this to us so that we can also mention this in the declaration. As the declarant / importer it remains your responsibility to provide the correct information to the customs declarant.

Effects of an incorrect declaration

An incorrect declaration can lead to various problems, even years later. The customs authorities can do a post-importation verification (CNI) up to 3 years later. Were there royalties and fees not included in the customs value, when they should have been? Then you may be faced with additional taxation and a fine.