Research On The Rules Of The Transaction Value Method In The Customs Valuation System

In order to actively implement China’s WTO accession commitments,"The Measures of the People’s Republic of China for Examining and Determining the Customs Value of Import and Export Goods",adopted in 2001,relatively completely and accurately introduced the basic rules on transaction value methods in the WTO Customs Valuation Agreement(hereinafter referred to as the "Valuation Agreement").,the transaction value method accordingly become the primary value guidelines for China’s customs valuation.However,with the increasing complexity of international trade activities,China’s current transaction value method rules have gradually exposed defects in practical application,which is insufficient to deal with the value fraud of enterprises to falsely declare transaction values in order to evade tariffs.This paper creatively takes the transaction value method rules established by "Valuation Agreement"(including the guidance issued by the WCO Technical Committee on Customs Valuation based on the "Valuation Agreement")and the U.S.legislation as the object of comparison,and adopts the normative analysis method,comparative analysis method and empirical analysis method to compare the applicable conditions,basic elements and adjustment items of the transaction value method with the current transaction value method rules in China.It is pointed out that there are shortcomings in the rules on the examination of related parties transactions,the determination of buyer’s commission and the taxable judgment of royalties,etc.In this regard,the relevant provisions of the Valuation Agreement(including the opinions of the WCO Technical Committee on Customs Valuation)and the U.S.legislation can be reasonably drawn on,and the characteristics of China’s customs valuation practice can be combined to make useful exploration on the further improvement of the existing rules on transaction value methods.Apart from the Introduction and Conclusion,this paper consists of the following parts.The first part,"The Meaning and Historical Evolution of the Transaction Value Method",discusses the meaning of the transaction value method and its historical development process in the world.It points out the basic concept,value concept,role status and specific development context of the transaction value method,and puts forward that the essence of the transaction value method is the product born under the era of economic globalization and free trade.The second part,"Rules for the Application of the Transaction Value Method",discusses the basic conditions that need to be met to apply the Transaction Value Method.It is pointed out that the Valuation Agreement uses the exclusionary method to list the circumstances in which the buyer’s disposal of the goods is restricted but does not prevent the application of the transaction value,the United States is basically the same as the Valuation Agreement but does not include "restrictions by government authorities",and China additionally lists the the restrictions that the buyer may be subject to in the disposal and use of the goods on the basis of the Valuation Agreement;The Valuation Agreement lists tie-in sales,mutual sales and other circumstances that make the transaction value uncertain,and the United States is consistent with the provisions of the Valuation Agreement,and China has added a reservation clause on the basis of the Valuation Agreement;The Valuation Agreement emphasizes that the proceeds from the resale of goods attributable to the seller should be reasonably determined,and China and the United States are consistent with the Valuation Agreement;The Valuation Agreement establishes the sales environment judgment method and the test price method to examine whether the related party affects the value,the United States takes the domestic freight of the exporting country as the adjustment item of the test price on the basis of the Valuation Agreement,and the sales environment judgment method stipulated in China is more abstract than the Valuation Agreement and the US legislation,and does not include the transaction value adjustment items into the scope of test price adjustment.It is proposed that China can refer to the Valuation Agreement(including the opinions of the WCO Valuation Technical Committee)and US legislation to fully improve the current review rules for related party transactions,so as to effectively regulate the value fraud of related enterprises in manipulating transfer pricing in order to evade taxation.The third part,"Basic Elements Rules for Determining Transaction Value",discusses the basic components of transaction value.It is pointed out that both the WCO Technical Committee on Customs Valuation and China use the "last sale" rule to determine the estimated sales in a series of sales,while the United States has established an exception to the "first sale" rule;Both the WCO Technical Committee on Customs Valuation and China define the price paid and payable on the basis of "constituting the conditions of sale of goods",and the United States uses "benefiting the seller" as the definition standard and forming the "Generra value hypothesis".It is proposed that China can learn from the United States to break the absolute application of the "last sale" rule,and add exceptions to the application of the "first sale" rule when enterprises use series sales to underquote transaction value.The fourth part,"Rules for Adjustment Items of Transaction Value",discusses the statutory adjustment items of transaction value.It is pointed out that the WCO Technical Committee on Customs Valuation believes that the buyer’s agent should be determined based on the nature of the service provided by the intermediary,and the United States has established the "bode fide buyer’s commission" review rule,and China has not yet established the standard for determining the buyer’s commission;The Valuation Agreement stipulates the type of assistance,value determination and apportionment method,and the United States attributes all costs borne by the buyer for the provision of assistance to the assistance value on the basis of the Valuation Agreement.The Valuation Agreement takes "related to the goods" and "constitutes the conditions for the sale of goods" as the taxable criteria for royalty fees,and the WCO Technical Committee on Customs Valuation believes that whether the royalty fee "constitutes a condition of sale" should be determined by "the relevance of the written agreement" and "the degree of control of the licensor over the production and sale of the goods",and the United States further determines whether the royalty fee is taxable based on the type of concession,object of payment and payment terms on the basis of the Valuation Agreement,and China develops the representation of royalties "in relation to goods" depending on the type of concession,but the interpretation of "constituting the conditions of sale of goods" is still more abstract;The Valuation Agreement takes "reasonable determination" and "related to the importation of goods" as the taxable conditions for resale proceeds of goods,and the United States is consistent with the provisions of the Valuation Agreement,and China does not specify that taxable resale proceeds need to be "related to the importation of goods" compared to the Valuation Agreement and US legislation.It is proposed that China can reasonably draw on the Valuation Agreement(including the opinions of the WCO Valuation Technical Committee)and US legislation,add rules for the review of buyers’ commissions and apportionment of assistance value,improve the taxable conditions for royalties and proceeds from the resale of goods,so as to regulate the value fraud of enterprises in concealing value adjustment items in order to pay less duties.The fifth part,"The Rule Defects of China’s Current Transaction Value Method and Its Overcoming",discusses the improvement of the rule defects of China’s current transaction value method from the aspects of application conditions,basic elements and adjustment items of the transaction value method,including increase the rules for examining the buyer’s commission and the rules for apportioning the assistance value;Improve the taxable conditions for resale proceeds of goods,the taxable conditions for royalties and the review rules for related party transactions;Reasonable adjustment of the rules for determining the estimated sales in series sales.The main conclusions of this paper: there are certain rules differences between the Valuation Agreement and the legislation of the United States and China in terms of the application conditions,basic elements and adjustment items of the transaction value method.There are gaps in the rules on the review of buyer’s commission and the apportionment of assistance value in China’s transaction value method rules,some of the rules are missing in the taxable judgment of royalties and the review of related party transactions,and there are flaws in the rules on the basis for determining the estimated sales in series sales;The the relevant provisions of Valuation Agreement(including the opinions of the WCO Technical Committee on Customs Valuation)and US legislation can be reasonably drawn upon to overcome the shortcomings of China’s current transaction value method as much as possible.