CONSOLIDATION

Valuation for Duty Regulations

SOR/86-792

Current to June 20, 2022



OFFICIAL STATUS OF CONSOLIDATIONS Subsections 31(1) and (3) of the Legislation Revision and Consolidation Act, in force on June 1, 2009, provide as follows: Published consolidation is evidence

31 (1) Every copy of a consolidated statute or consolidated regulation published by the Minister under this Act in either print or electronic form is evidence of that statute or regulation and of its contents and every copy purporting to be published by the Minister is deemed to be so published, unless the contrary is shown. ... Inconsistencies in regulations

(3) In the event of an inconsistency between a consolidated regulation published by the Minister under this Act and the original regulation or a subsequent amendment as registered by the Clerk of the Privy Council under the Statutory Instruments Act, the original regulation or amendment prevails to the extent of the inconsistency.

LAYOUT The notes that appeared in the left or right margins are now in boldface text directly above the provisions to which they relate. They form no part of the enactment, but are inserted for convenience of reference only.

NOTE This consolidation is current to June 20, 2022. Any amendments that were not in force as of June 20, 2022 are set out at the end of this document under the heading “Amendments Not in Force”.

Current to June 20, 2022

TABLE OF PROVISIONS Regulations Respecting the Determination of the Value for Duty of Imported Goods 1

Short Title

Interpretation

2.1

Meaning of “purchaser in Canada”

Determination of the Value for Duty of Imported Goods

Current to June 20, 2022

ii

Registration SOR/86-792 July 24, 1986

CUSTOMS ACT Valuation for Duty Regulations

P.C. 1986-1668

July 23, 1986

Whereas, pursuant to subsection 164(3) of the Customs Act*, a copy of the proposed Regulations respecting the determination of the value for duty of imported goods was published in the Canada Gazette Part I on March 15, 1986 and a reasonable opportunity was thereby afforded to interested persons to make representations with respect thereto. Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of National Revenue, pursuant to subsection 48(3), subparagraph 48(5)(a)(iii), paragraph 51(4)(a), subsection 52(2) and paragraph 164(1)(i) of the Customs Act, is pleased hereby to make the annexed Regulations respecting the determination of the value for duty of imported goods, effective on the day that the Customs Act*, other than paragraph 99(1)(b), subsection 99(2) to (4) and sections 192 to 194 thereof, comes into force.

*

S.C. 1986, c. 1

Current to June 20, 2022

Regulations Respecting the Determination of the Value for Duty of Imported Goods

Short Title 1 These Regulations may be cited as the Valuation for Duty Regulations.

Interpretation [SOR/97-443, s. 1(F)]

2 The definitions in this section apply in these Regulations. Act means the Customs Act. (Loi) permanent establishment, in respect of a person, means a fixed place of business of the person and includes a place of management, a branch, an office, a factory or a workshop through which the person carries on business. (établissement stable) resident means (a) an individual who ordinarily resides in Canada; (b) a corporation that carries on business in Canada

and of which the management and control is in Canada; and (c) a partnership or other unincorporated organization that carries on business in Canada, if the member that has the management and control of the partnership or organization, or a majority of such members, resides in Canada. (résident) SOR/97-443, s. 2.

Meaning of “purchaser in Canada” 2.1 For the purposes of subsection 45(1) of the Act, purchaser in Canada means (a) a resident; (b) a person who is not a resident but who has a permanent establishment in Canada; or

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Valuation for Duty Regulations Meaning of “purchaser in Canada” Sections 2.1-3

(c) a person who neither is a resident nor has a permanent establishment in Canada, and who imports the goods, for which the value for duty is being determined, (i) for consumption, use or enjoyment by the person in Canada, but not for sale, or (ii) for sale by the person in Canada, if, before the purchase of the goods, the person has not entered into an agreement to sell the goods to a resident. SOR/97-443, s. 2.

Determination of the Value for Duty of Imported Goods 3 For the purposes of subsection 48(3) of the Act, in determining whether the transaction value of goods being appraised closely approximates another value referred to in that subsection, there shall be taken into consideration (a) the following factors, namely, (i) the nature of the goods being appraised, (ii) the nature of the industry that produces the goods being appraised, (iii) the season in which the goods being appraised

are imported, and (iv) whether a difference in values is commercially significant; and (b) any difference in respect of the sales being compared, determined on the basis of sufficient information and relating to (i) the trade levels at which the sales take place, (ii) the quantity levels of the sales, (iii) any of the amounts referred to in subsection

48(5) of the Act, and (iv) the costs, charges or expenses that are incurred

by a vendor when selling to a purchaser to whom he is not related, but are not incurred when a vendor sells to a purchaser to whom he is related.

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Valuation for Duty Regulations Determination of the Value for Duty of Imported Goods Section 4

4 (1) For the purposes of subparagraph 48(5)(a)(iii) of

the Act, the value of any goods referred to in clauses 48(5)(a)(iii)(A) to (C) of the Act that are supplied, directly or indirectly, by the purchaser of the imported goods referred to in that subparagraph shall be determined, in relation to the goods that are supplied, (a) by ascertaining (i) their cost of acquisition or lease incurred by the purchaser, if they are acquired or leased from a person who is not related to the purchaser at the time of the acquisition or lease, (ii) their cost of acquisition or lease incurred by the person from whom the purchaser acquires or leases them, if that person does not produce the goods and is related to the purchaser at the time of the purchaser’s acquisition or lease, or (iii) their cost of production, if they are produced by the purchaser or by a person related to the purchaser at the time of production; (b) by adding thereto (i) their cost of transportation to the place where they are used in the production of the imported goods, and (ii) the value added to them by any repairs or modifications made after their acquisition, lease or production, as the case may be; and (c) by deducting therefrom an amount to account for

any use made of them after their acquisition, lease or production, as the case may be, and before their use in the production of the imported goods. (2) For the purposes of subparagraph 48(5)(a)(iii) of the Act, the value of any work, plans or sketches referred to in clause 48(5)(a)(iii)(D) of the Act that are supplied, directly or indirectly, by the purchaser of the imported goods referred to in that subparagraph shall be determined by ascertaining, in relation to the work, plans or sketches, (a) their cost of acquisition or lease incurred by the

purchaser, if they (i) are not available generally to the public, and (ii) are acquired or leased from a person who is not

related to the purchaser at the time of the acquisition or lease;

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Valuation for Duty Regulations Determination of the Value for Duty of Imported Goods Sections 4-5

(b) their cost of acquisition or lease incurred by the

person from whom the purchaser acquires or leases them, if (i) that person does not produce the work, plans or

sketches, and is related to the purchaser at the time of the purchaser’s acquisition or lease, and (ii) the work, plans or sketches are not available

generally to the public; (c) the cost to the public of obtaining copies of them,

if they are available generally to the public; or (d) their cost of production, if they are produced by

the purchaser or a person related to him at the time of production. 4.1 Before making a determination under subsection 48(7) of the Act, an officer shall (a) notify the person who accounted for the goods under section 32 of the Act of the grounds for the officer’s belief that the information submitted in support of the transaction value of the goods is inaccurate; (b) request in writing that the person submit to the officer, within 30 days after the request, additional information in support of the transaction value of the goods; (c) review any additional information received in response to the request referred to in paragraph (b); (d) where no additional information is received or following the review of the additional information, if the officer continues to believe on reasonable grounds that the information submitted is inaccurate, at least 30 days before making the determination, give written notice to the person of the grounds for the officer’s belief that the information submitted is inaccurate. SOR/95-14, s. 1.

4.2 Where an officer makes a determination under subsection 48(7) of the Act, the officer shall give written notice of the determination and the reasons for making it to the person referred to in paragraph 4.1(a). SOR/95-14, s. 1.

5 (1) For the purposes of paragraph 51(4)(a) of the Act,

an amount equal to the amount of commission or the amount for profit and general expenses, as referred to therein in respect of the appraisal of imported goods, shall be calculated on a percentage basis and determined from sufficient information that is prepared in a manner

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Valuation for Duty Regulations Determination of the Value for Duty of Imported Goods Sections 5-6

consistent with generally accepted accounting principles and, subject to subsection (2), is supplied by or on behalf of the importer of the goods being appraised. (2) Where the amount determined from sufficient information supplied by or on behalf of an importer pursuant to subsection (1) is not consistent with the amount generally earned or reflected in connection with sales in Canada by importers who deal with vendors in a manner consistent with that of persons who are not related to each other, the sufficient information shall be based on an examination of sales in Canada (a) of the narrowest group or range of goods of the same class or kind as the goods being appraised, including the goods being appraised; (b) by importers dealing with vendors in a manner

consistent with that of persons who are not related to each other; and (c) from which sufficient information can be obtained.

6 (1) For the purposes of paragraph 52(2)(a) of the Act,

the costs, charges and expenses, or the value, referred to therein in respect of goods being appraised shall be determined on the basis of the following accounts or information supplied by or on behalf of the producer of the goods and prepared in a manner consistent with generally accepted accounting principles of the country of production of the goods being appraised: (a) the commercial accounts of the producer of the goods being appraised; or (b) other sufficient information relating to the production of the goods being appraised. (2) For the purposes of paragraph 52(2)(b) of the Act, the

amount for profit and general expenses referred to therein in respect of goods being appraised shall be calculated on a percentage basis and determined from sufficient information that is prepared in a manner consistent with generally accepted accounting principles of the country of production of the goods being appraised and, subject to subsection (3), is supplied by or on behalf of the producer of the goods being appraised. (3) Where the amount determined from sufficient information supplied by or on behalf of a producer pursuant to subsection (2) is not consistent with the amount generally reflected in sales for export to Canada by producers of goods of the same class or kind who deal with importers in a manner consistent with that of persons who

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Valuation for Duty Regulations Determination of the Value for Duty of Imported Goods Section 6

are not related, the sufficient information shall be based on an examination of sales for export to Canada (a) of the narrowest group or range of goods of the

same class or kind as the goods being appraised, including the goods being appraised; (b) by producers dealing with importers in a manner consistent with that of persons who are not related; and (c) from which sufficient information can be obtained.

Current to June 20, 2022

