Also known as: Related parties, Linked parties, Transfer pricing customs
A legal, commercial, or control relationship between buyer and seller in an international transaction—such as subsidiaries, partners, employer-employee, or family members—that customs authorities examine to verify that the transaction price is not influenced by the relationship and reflects actual market value.
Related party transactions exist when buyer and seller maintain a relationship that could potentially influence the merchandise price. Article 15.4 of the WTO Valuation Agreement and Article 68 of Mexico's Customs Law define specific cases of related parties and establish the procedure for evaluating whether the transaction price between related parties is acceptable as customs value.
The existence of a relationship does not mean the transaction value is unacceptable. The importer can demonstrate that the price is comparable to transactions between unrelated parties using 'test values' provided in Article 1.2 of the Agreement.
Multinational companies importing from their own affiliates must maintain a robust transfer pricing file including comparability studies, intercompany pricing policies, and documentation demonstrating that the price was not influenced by the relationship. Coordination between the tax area (transfer pricing for income tax) and the customs area (valuation) is essential to avoid inconsistencies.
Transaction Value
The price actually paid or payable for imported goods, adjusted as prescribed by the WTO Valuation Agreement. It is the primary method for determining customs value.
TradeCustoms Value
The monetary amount on which import duties are calculated, determined according to the WTO Valuation Agreement with transaction value as the primary method.
ValuationDutiable Charges (Assists)
Costs and values that must be added to the price actually paid or payable for imported goods to determine customs value, including commissions, packing, assists, royalties, licenses, and certain transport and insurance costs not included in the invoice price.
ValuationFirst Sale Price
An alternative customs valuation method that allows using the price of the first sale in a chain of successive transactions—typically from manufacturer to middleman—as the basis for determining customs value, instead of the last sale price to the importer.