What are Customs Value and Customs Cleared Value?

One of the most important procedures during the customs clearance stage is determining the value of the goods subject to customs. Since customs duties are calculated based on the value of the goods, determining the true value of the merchandise is extremely important. In addition, determining the correct customs value for specific goods is crucial for the accurate implementation of practices such as increasing state revenue, effective protection, and incentives. Furthermore, the correct assessment of all other taxes collected on import shipments is also of great importance for the consistency and reliability of the resulting statistical data. Within this framework, this article will address the topics of “customs value,” “customs cleared value,” and “determination of customs value.”

In determining the “customs value” of imported goods, both the Customs Authority and importers bear significant responsibility. However, one of the most common areas of dispute arises from disagreements between the Customs Authority and importers. The main issue here is the occurrence of disputes in determining the value of goods due to differences in interpretation during the application of the current legislation.

According to customs legislation, “The customs value of goods is the value determined within the framework of Articles 23 to 31 of Customs Law No. 4458 for the purpose of applying the customs tariff and certain non-tariff regulations related to trade in goods.”

The “customs value” is determined by applying the following methods in order:

• Transaction Value Method

• Transaction Value of Identical Goods Method

• Transaction Value of Similar Goods Method

• Deductive Method

• Computed Value Method

• Fallback Method

The principle behind applying the above methods is that the transaction value method is used first. If there is a situation that prevents the application of this method, the other methods are applied sequentially.

If the “customs value of the goods” can be determined according to a preceding method, there is no need to proceed to the next method. However, provided that a written request submitted by the declarant is deemed appropriate by the Customs Authority, the order of application of the “deductive method” and the “computed value method” may be changed.

What Is Customs Cleared Value?

“Customs value” and “CIF” are two concepts that are most commonly confused with each other. The customs cleared value is the value calculated by adding all taxes and CIF (Cost, Insurance, and Freight, meaning goods value + insurance + freight). According to customs valuation techniques, CIF is the most basic but also the most limited definition. Customs value, on the other hand, is the broadest definition under valuation techniques and covers almost everything related to the value of the goods. In short, customs value and customs cleared value are not the same, and if tax calculations are made based solely on CIF, the true customs value may not always be reached, which can lead to errors.

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