Are you related?

The price of goods listed on shipping documents is used to assess duties and taxes.  Commercially the first thought between related companies would be that goods should be transferred between them at discounted or net prices.  This is not however, the view of customs authorities.   The rule is that prices must be at ‘arm’s length’.  This means that the price of goods listed on the shipping documents for customs purposes must be the same as if the transaction was between companies that have no relationship at all.

There are of course detailed rules about how the price must be calculated and what can and cannot be left out of the price for customs purposes.   The more global trade becomes the more likely it is that companies are related in some way so take care with your relations!

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