Preliminary questions on the inclusion of royalties and licence fees in the customs value

Licence fees, Customs

Article 32 (1) (c) of the Customs Code first does not require the amount of royalties to be determined at the time when an agreement is concluded or when the customs debt is incurred, in order for those royalties to be regarded when the value is to be determined. On the other hand the article applies to the goods to be valued, even if those royalties only partly relate to those goods.

"Having regard to the foregoing considerations, the answer to the first and second questions is that Article 32(1)(c) of the Customs Code must be interpreted as, first, not requiring the amount of royalties or licence fees to be determined at the time when a licence agreement was concluded or when the customs debt was incurred in order for those royalties or licence fees to be regarded as related to the goods being valued and, second, allowing such royalties or licence fees to be “related to the goods being valued” even if those royalties or licence fees relate only partly to those goods."

Royalties constitute “a condition for the sale” when –within a group of companies- the payment of these royalties is requested by a company that is connected to both the buyer and the seller and the payment is carried out to the seller,  in the sense of  article 32 (1) (c) of the Customs Code and article 160 of Regulation no.2454/93. Royalties or licence fees are a “condition of sale” of the goods being valued,  to be paid by an undertaking related to the seller and the buyer and paid to an undertaking.

"Having regard to the foregoing, the answer to the third question is that Article 32(1)(c) of the Customs Code and Article 160 of Regulation No 2454/93 must be interpreted as meaning that royalties or licence fees are a “condition of sale” of the goods being valued where, within a single group of undertakings, those royalties or licence fees are required to be paid by an undertaking related to both the seller and the buyer and were paid to that same undertaking."

The adjustment and apportionment measures, referred to in articles 32 (1) (c) and 158 (3) No. 2452/93 may also be applied where the customs value of the goods at issue is determined on the basis of the alternative method of article 31 of the Customs Code. When the customs value at issue has not been determined based on article 29 of the Customs Code.

"Having regard to the foregoing, the answer to the fourth question is that Article 32(1)(c) of the Customs Code and Article 158(3) of Regulation No 2454/93 must be interpreted as meaning that the adjustment and apportionment measures, referred to in those provisions respectively, may be applied where the customs value of the goods at issue has been determined, not on the basis of Article 29 of the Customs Code, but on the basis of the alternative method laid down in Article 31 of that code."

CJEU, 9 March 2017, GE Healthcare v Hauptzollamt Dusseldorf

C-173/15 - ECLI:EU:C:2017:195