UPDATE ON OFFICIAL LETTER 14371/CHQ-NVTHQ: CUSTOMS VALUATION FOR R&D COSTS
According to the guidance, expenses such as design drawings, technical drawings, and research results—if directly used in the production of imported goods—may be considered assists and must be included in the customs value.
1. Conditions for Adding R&D Costs to Customs Value
R&D-related costs must be added to the customs value if all the following conditions are met:
- Paid by the buyer and not included in the purchase price
- Directly related to the imported goods
- Supported by objective documents and data for valuation
2. Cases Where Valuation Basis Is Insufficient
If there is insufficient basis to determine the value of such costs, the customs authority will not apply the transaction value method and will instead use alternative valuation methods in accordance with regulations.
This may result in differences in taxable value and potential risks of tax reassessment.
3. Responsibilities of Businesses
Businesses are responsible for:
- Declaring all relevant R&D-related costs
- Allocating such costs appropriately into the customs value
- Preparing sufficient supporting documentation
4. Reference Document
📄 Official Letter 14371/CHQ-NVTHQ
5. Recommendations
Businesses should proactively review all R&D-related costs within their supply chain to ensure proper declaration in accordance with regulations and to minimize risks related to customs valuation and taxation.
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