On 3 August 2017, the Federal Ministry of Finance (BMF) published a leaflet on licence fees in customs value law. It describes in detail in which constellations and in what proportion royalties are to be included in the customs value of imported goods in accordance with Art. 71 (1) (c) of the Union Customs Code (UCC). Companies should be aware of when license fees should be added to the purchase price in order to avoid the risk of criminal or fine proceedings.
What are licence fees within the meaning of Art. 71 para. 1 lit. c) UZK?
According to the BMF, licence fees are remunerations paid for the right to use know-how, patents, copyrights, trademark rights, etc. However, costs for the embossing of trademarks were not included but represented manufacturing costs. Payments for know-how were also not licence fees, but could be included in the customs value under Article 71 (1) (b) IV) UZK if the know-how was acquired outside the EU.
When are license fees added?
A condition for an addition to the purchase price is a purchase of the licence fee to the imported goods. The time of import is decisive. In order to obtain an addition, the rights transferred as consideration for the licence fee would have to be embodied in the imported goods (e.g. a copyright or trademark right) or the services of the licensor (e.g. know-how or design) would have to have already been applied in the production of the import goods. Furthermore it is necessary that the buyer has to pay the licence fees according to the contract. Here both the contracts (license and purchase contract) as well as the other accompanying circumstances of the purchase transaction are to be examined in detail.
Customs value relevant part of the licence fee
Where the royalties relate both to rights and services which are relevant to customs value and to rights and services which are not, an allocation should be made. Customs declarants should provide a sufficient database for this purpose. Otherwise it is possible that the customs authorities estimate the amount of the licence fees relevant to customs value in the context of a customs value determination in accordance with Art. 74 para. 3 UZK to your disadvantage in case of doubt.
Allocation of the proportion relevant to customs value to the imported goods
The distribution of the proportion relevant to customs value among the imported goods would be effected by determining surcharge rates on the basis of representative figures and sales results. The calculation is made by relating the customs value-relevant portion of the licence fees for a certain period to the sum of the import prices for products subject to licensing calculated in the same period.
Prevent risks now
Companies should ensure that the customs value of imported goods is always correctly calculated. Incorrect duties in the customs declaration always entail the risk of criminal-law or fine-law consequences.
We check for you the customs values of the goods you import.