Promulgation Authorities:  General Administration of Customs

Promulgation Date:  2013.12.25

Effective Date:  2014.02.01

Validity Status:  valid

Document Number:  General Administration of Customs Order No. 213

Measures of the PRC Customs on Determination of Dutiable Value for Imports and Exports

Measures of the PRC Customs on Determination of Dutiable Value for Imports and Exports

General Administration of Customs Order No. 213

25 December 2013

Chapter 1 General Principles

Article 1    These Measures are formulated pursuant to the Customs Law of the People's Republic of China (hereinafter referred to as the "Customs Law"), the Regulations of the People's Republic of China on Import and Export Tariffs for the purposes of proper determination of the dutiable value of imports and exports.

Article 2    The Customs shall comply with the principles of objectiveness, fairness and unity for proper determination of the dutiable value of imports and exports.

Article 3    These Measures shall apply to the determination of the dutiable value of imports and exports by the Customs.

These Measures shall not apply to the determination of the dutiable value of domestic bonded goods, imported luggage items of inbound visitors, personal postal items and other personal consumables, the taxable price of imports and exports, and alleged smuggled items.

Article 4    The Customs shall keep proper care of information involving commercial secrets provided by taxpayers in accordance with the relevant provisions of the State and shall not disclose such information to external parties, unless otherwise provided in the laws and administrative regulations.

Taxpayers may request to the Customs in writing on keeping commercial secrets confidential and set out the contents to be kept confidential, and shall not use commercial secret as a reason to refuse providing the relevant information to the Customs.

Chapter 2 Dutiable Value of Imports

Section 1 Method for determination of dutiable value of imports

Article 5    The dutiable value of imports shall be examined and determined by the Customs on the basis of the transacted price of the goods and shall include transportation and related expenses and insurance premium of the goods prior to unloading at the place of arrival of the goods in the People's Republic of China.

Article 6    Where the transacted price of the imports does not comply with the provisions of Section 2 of this Chapter or where the transacted price cannot be determined, the Customs shall, upon clarifying the relevant information and carrying out price negotiation with the taxpayer, the dutiable value of such goods shall be examined and determined in accordance with the following methods:

(1) valuation method using transacted price of identical goods;

(2) valuation method using transacted price of similar goods;

(3) chargeback price valuation method;

(4) computed price valuation method; and

(5) reasonable method.

Upon provision of the relevant information to the Customs, taxpayers may request to reverse the sequence of application of (3) and (4) above.

Section 2 Transacted Price Valuation Method

Article 7    The transacted price of imports shall mean the total amount of actual payment made by the buyer or payable to the seller which is adjusted in accordance with the provisions of Section 3 of this Chapter for such imports at the time of sale of such goods by the seller within the People's Republic of China, including amounts paid directly and indirectly.

Article 8    The transacted price of imports shall satisfy the following criteria:

(1) there is no restriction on disposal or use of imports by the buyer, except for restrictions on implementation and restrictions which have no substantive impact on sales territory and price of goods as provided by the laws and administrative regulations;

(2) the price of imports shall not be affected by the criteria or factors which cause the transacted price of the goods to be undeterminable;

(3) the seller shall not obtain any gains directly or indirectly through sale, disposal, or use of the imports by the buyer, or where there are gains but adjustments can be made in accordance with the provisions of the item (d) of the first paragraph of Article 11;

(4) there is no special relationship between the buyer and the seller or, where there is a special relationship but, in accordance with the provisions of Article 17 and Article 18, has no effect on the transacted price.

Article 9    Under any of the following circumstances, restrictions shall be deemed to have been imposed on the disposal or use of imports by the buyer:

(1) the imports can only be used for exhibition or gift purposes;

(2) the imports can only be sold to designated third parties;

(3) the imports can only be sold to the seller or designated third parties after being processed into finished products; and

(4) restriction on the disposal or use of the imports by the buyer is ascertained upon examination by the Customs.

Article 10    Under any of the following circumstances, the price of imports shall be deemed to have been affected by the criteria or factors which cause the transacted price of the goods to be undeterminable:

(1) the price of imports is determined in accordance with the criterion that the buyer shall purchase a certain quantity of other goods from the seller;

(2) the price of imports is determined in accordance with the criterion that the buyer shall sell other goods to the seller; and

(3) it is ascertained upon examination by the Customs that the price of the goods is affected by the criteria or factors which cause the transacted price of the goods to be undeterminable.

Section 3 Adjusted Items of Transacted Price

Article 11    When the dutiable value of imports is examined and determined on the basis of the transacted price, the following expenses or value which have not been included in the actual price or payable price of the goods shall be included in the dutiable value:

(1) the following expenses to be borne by the buyer:

(a) commission and broker's fee other than commission for procurement;

(b) expenses of containers deemed to be part of the goods; and

(c) packaging material costs and packaging labour costs;

(2) the value of the following goods or services related to manufacturing of imports and sale within the People's Republic of China which are provided by the buyer free of charge or below cost and may be apportioned in the appropriate proportions:

(a) materials, components, parts, and similar goods included in the imports;

(b) tools, models, and similar goods used in the process of manufacturing of the imports;

(c) materials consumed in the process of manufacturing of the imports; and

(d) engineering design, technical research and development, craft, drafting, and related services required for manufacturing of the imports overseas;

(3) royalties to be paid by the buyer directly or indirectly to the seller or related parties, except for those paid under any of the following circumstances:

(a) the royalties are not related to such goods; or

(b) payment of royalties shall not constitute a criterion for sale of such goods within the People's Republic of China; and

(4) gains derived by the seller directly or indirectly from the buyer's income from sale, disposal, or usage of such goods following importation.

Taxpayers shall provide the Customs with objective and quantifiable data of the expenses or values stipulated in this Article. Where the taxpayer is unable to provide, the Customs shall, upon price negotiation with the taxpayer, examine and determine the dutiable value in accordance with the methods set out in Article 6.

Article 12    The relevant expenses shall be computed in accordance with the following methods when computing the value of goods to be included in the dutiable value of imports in accordance with the provisions of item (b) of the first paragraph of Article 11:

(1) where the buyer has made the purchase from a third party which does not have a special relationship with the buyer, the value to be included shall be the purchase price;

(2) where the buyer manufactures on its own or has obtained the goods from a third party which has a special relationship with the buyer, the value to be included shall be the production costs;

(3) where the buyer has obtained the goods through leasing, the value to be included shall be the leasing cost borne by the buyer;

(4) the value of tools, models, and similar goods used in the process of manufacturing the imports shall include the engineering design, technical research, craft and drafting expenses, etc.

If the goods have been used by the buyer before provision to the seller, the value to be included shall be the depreciated value derived using the recognised accounting principles in China.

Article 13    Royalties which satisfy any of the following criteria shall be deemed to be related to the imports:

(1) royalties for the right to use patent rights or proprietary technologies and the imports fall under any of the following categories:

(a) inclusive of a patent or proprietary technology;

(b) manufactured using a patented method or proprietary technology; or

(c) specially designed or manufactured for the implementation of a patent or proprietary technology;

(2) royalties for trademark rights and the imports fall under any of the following categories:

(a) attached with a trademark;

(b) attached with a trademark following importation and can be sold directly; or

(c) attached with trademark rights at the time of importation and can be sold following the attaching of a trademark after mild processing;

(3) royalties for copyright and the imports fall under any of the following categories:

(a) imports which include software, text, tunes, pictures, images, or other similar contents, including magnetic tape, magnetic disc, laser disc, or other similar media format; or

(b) imports which include copyrighted contents of others; and

(4) royalties for distribution rights, selling rights, or other similar rights and the imports fall under any of the following categories:

(a) can be sold directly following importation; or

(b) can be sold following mild processing.

Article 14    Where the buyer cannot purchase the imports without paying the royalties or the goods cannot be delivered on the terms of the contract if the buyer does not pay the royalties, the payment of royalties shall be deemed as a criterion for sale of such imports to the People's Republic of China.

Article 15    The following taxes and expenses listed individually in the price of the imports shall not be included in the dutiable value of such goods:

(1) construction, installation, assembly, maintenance, or technical support expenses of plant, machinery, or equipment, etc, incurred following importation, with the exception of repair expenses;

(2) transportation and related expenses and insurance premium incurred after unloading of the imports upon arrival in the People's Republic of China;

(3) import tariff, import-linked taxes levied by the customs and other domestic taxes;

(4) fees paid for duplication of the imports in China; and

(5) expenses incurred for technical training and overseas observation, and study in China and overseas.

Interest expenses which satisfy the following criteria simultaneously shall not be included in the dutiable value:

(1) the interest expenses incurred for financing the purchase of the imports;

(2) there is a financing agreement in writing;

(3) the interest expenses are listed out individually; or

(4) the taxpayer can prove that the interest rate is not higher than the normal interest rate for financing such transactions in the locality at the same time and the actual paid or payable price of imports is very close to that of identical or similar imports where there is no financing arrangement.

Section 4 Special Relationship

Article 16    Under any of the following circumstances, the buyer and the seller shall be deemed to have a special relationship:

(1) the buyer and the seller are family members;

(2) the buyer and the seller are senior management personnel or directors;

(3) one party is directly or indirectly controlled by the other party;

(4) both the buyer and the seller are directly or indirectly controlled by a third party;

(5) the buyer and the seller have joint control over a third party directly or indirectly;

(6) either party owns, controls or holds 5% or more (inclusive of 5%) of the voting shares of the other party directly or indirectly;

(7) one party is an employee, a senior management personnel, or a director of the other party; or

(8) the buyer and the seller are both members of a partnership.

Where the buyer and the seller are related in business or one party is the sole agent, sole distributor, or sole transferee of the other party and satisfy the provisions of the preceding paragraph(s), they shall be deemed to have a special relationship.

Article 17    Where there is a special relationship between the buyer and the seller but the taxpayer is able to prove that the transacted price is close to any of the following prices at the same time or roughly around the same time, the special relationship shall be deemed to have no effect on the transacted price of the imports:

(1) the transacted price of identical or similar imports sold to a buyer in China which does not have a special relationship with the seller;

(2) the dutiable value of identical or similar imports determined in accordance with the provisions of Article 23; or

(3) the dutiable value of identical or similar imports determined in accordance with the provisions of Article 25.

When making a comparison using the aforesaid price(s), the Customs shall consider the difference in commercial standards and import quantities, as well as whether the variance in costs is affected by the buyer and the seller having a special relationship.

Article 18    Upon examination of information relating to sales of goods, where the sales comply with the general commercial practice, the Customs may determine that the special relationship does not have effect on the transacted price of imports.

Section 5 Valuation Methods other than the Transacted Price Valuation Method

Article 19    The valuation method using transacted price of identical goods shall mean the valuation method adopted by the Customs for examination and determination of the dutiable value of imports on the basis of the transacted price of identical goods sold to the People's Republic of China at the time of importation or roughly around the same time.

Article 20    The valuation method using transacted price of similar goods shall mean the valuation method adopted by the Customs for examination and determination of the dutiable value of imports on the basis of the transacted price of similar goods sold to the People's Republic of China at the time of importation or roughly around the same time.

Article 21    Where the valuation method using transacted price of identical or similar goods is adopted for examination and determination of the dutiable value of imports, the transacted price of identical or similar goods which are equal in commercial standards and basically consistent in import quantity shall be used. Where the aforesaid price is used, adjustment to the variance in costs and expenses between such goods and identical or similar goods shall be made using objective and quantifiable data.

Where the valuation method using transacted price of identical or similar goods is adopted for examination and determination of the dutiable value of imports, the transacted price of identical or similar goods which are equal in commercial standards and basically consistent in import quantity shall be used. Where the aforesaid price is used, adjustment to the variance in costs and expenses between such goods and identical or similar goods shall be made using objective and quantifiable data.

Article 22    Where the valuation method using transacted price of identical or similar goods is used for examination and determination of the dutiable value of imports, the transacted price of identical or similar goods produced by the same manufacturer shall first be used.

Where there is no such transacted price for identical or similar goods produced by the same manufacturer, the transacted price of identical or similar goods produced by other manufacturers in the same country or region of manufacture may be used.

Where there are a few transacted prices of identical or similar good, the examination and determination of the dutiable value of imports shall be based on the lowest transacted price.

Article 23    The chargeback price valuation method shall mean the valuation method adopted by the Customs for examination and determination of the dutiable value of imports on the basis of the selling price of the imports or identical or similar imports in China less the relevant expenses incurred in China; the selling price shall satisfy the following criteria simultaneously:

(1) the selling price of such goods , identical or similar imports in China at the time of importation or roughly around the same time;

(2) the selling price based on the conditions of the goods at the time of importation;

(3) the selling price during the first sales cycle in China;

(4) the selling price offered to a party in China which does not have a special relationship with the seller; and

(5) the selling price of goods at which the aggregate sales volume is the largest.

Article 24    Where the chargeback price valuation method is used for examination and determination of the dutiable value of imports, the following items shall be deducted:

(1) the normal profits and general expenses of same grade or type of goods sold in China during the first sales cycle in China (including direct expenses and indirect expenses) and commission paid generally;

(2) transportation and related expenses and insurance premium after unloading of the goods following arrival in China; and

(3) import tariff, import-linked taxes levied by the customs and other taxes in China.

If such goods, identical or similar goods, were not sold in China in accordance with the conditions at the time of importation, at the request of the taxpayer and provided that other conditions stipulated in Article 23 are satisfied, the selling price of the goods following further processing may be used for examination and determination of the dutiable value but the value-added amount from processing shall be deducted simultaneously.

Computation of the value-added amount from processing stipulated in the preceding paragraph shall be based on objective and quantifiable data related to the processing cost, the standard and computation method recognised by the industry and other industry practices.

Accounting principles and methods consistent with recognised accounting principles in China shall be used for determination of items to be deducted in accordance with the provisions of this Article.

Article 25    The computed price valuation method shall refer to the valuation method whereby the Customs examine and determine the dutiable value of imports based on the aggregate of the following items:

(1) material costs and processing fees incurred for manufacturing of such goods;

(2) normal profits and general expenses (including direct expenses and indirect expenses) for selling goods of same grade or type in China; and

(3) transportation and related expenses, and insurance premium prior to the unloading of such goods following the arrival in China.

When examining and determining the dutiable value of imports in accordance with the provisions of the preceding paragraph, the Customs may verify the relevant materials provided by such enterprise overseas after obtaining the consent of the overseas manufacturer and notifying the government of the country or region in advance.

The principles and methods consistent with the accounting principles recognised by the country or region of manufacture shall be determining the relevant value or expense in accordance with the provisions of the first paragraph.

Article 26    Reasonable method shall mean the valuation method adopted by the Customs for examination and determination of the dutiable value of imports based on objective and quantifiable data in accordance with the principles stipulated in Article 2 when the Customs is unable to adopt the transacted price valuation method , valuation method using the transacted price of identical goods, valuation method using the transacted price of similar goods, chargeback price valuation method, and computed price valuation method for determination of dutiable value.

Article 27    The Customs shall not use the following prices when adopting the reasonable method to determine the dutiable value of imports:

(1) domestic selling price of domestically produced goods;

(2) the higher price out of available prices;

(3) selling price of the goods in the market of the origin of export;

(4) the price of identical or similar goods computed using value of expenses other than those stipulated in Article 25;

(5) selling price of goods exported to a third country or region; or

(6) minimum price or arbitrary or suppositious price.

Chapter 3 Dutiable Value of Special Imports

Article 28    For machinery and apparatus, transportation vehicle, or other goods which are shipped overseas for repair and declared to the Customs upon exit and shipped back to China within the period stipulated by the Customs, the dutiable value shall be examined and determined on the basis of overseas repair fee and costs of materials and parts.

Where goods shipped overseas for repair are not shipped back to China within the period stipulated by the Customs, the dutiable value shall be examined and determined by the Customs in accordance with the provisions of Chapter 2.

Article 29    For goods which are shipped overseas for processing and declared to the Customs upon exit and shipped back to China within the period stipulated by the Customs, the dutiable value shall be examined and determined on the basis of overseas processing fee and costs of materials and parts, the transportation and related expenses, and insurance premium incurred for shipping of the goods back into China.

Where goods shipped overseas for processing are not shipped back to China within the period stipulated by the Customs, the dutiable value shall be examined and determined by the Customs in accordance with the provisions of Chapter 2.

Article 30    Goods approved by the Customs for temporary entry into China shall be taxable and the dutiable value shall be examined and determined by the Customs in accordance with the provisions of Chapter 2. The dutiable value of goods approved by the Customs for retention and temporary entry into China shall be the retention price examined and determined by the Customs.

Article 31    The dutiable value of goods imported by way of lease shall be examined and determined in accordance with the following methods:

(1) where rental is paid to overseas for leased goods, the dutiable value for the lease period shall be the rental examined and determined by the Customs and interest shall be computed;

(2) the dutiable value of leased goods which are retained shall be the retention price examined and retained by the Customs;

(3) a taxpayer who has applied for one-off payment of taxes may opt to apply for selection of a method stipulated in Article 6 to determine the dutiable value or the total rental amount determined and examined by the Customs shall be the dutiable value.

Article 32    Where imported goods which are subject to tax reduction or exemption are required to make up tax payment, the dutiable value shall be the original import determined and examined by the Customs less the depreciation as computed below:

Dutiable = Original price examined by the Customs at the × (1 ? Period of time lapsed (month) from importation up to tax payment being made up

value time of importation Regulatory period x 12

The "period of time lapsed from importation up to tax payment being made up" in the aforesaid formula shall be computed in terms of months; where the period is less than one month but exceeds 15 days, the period shall be taken to be one month; a period of less than 15 days shall be disregarded.

Article 33    For goods imported by way of barter trade, consignment, donations, and gifts, etc, which do not have a transacted price, the Customs shall enter into a price negotiation with the taxpayer and examine and determine the dutiable value in accordance with a method stipulated in Article 6.

Article 34    Under any of the following circumstances, the dutiable value of data processing equipment loaded with a software medium shall be examined and determined on the basis of the value or cost of the medium:

(1) the value or cost of the medium is listed separately from the software; or

(2) although the value or cost of the medium is not listed separately from the software, the taxpayer is able to provide the proof document for the value or cost of the medium or the proof document for the value of the software.

The provisions of the preceding paragraph shall not apply to media which include art, photography, voices, images, audio-visual productions, games, or electronic publications.

Chapter 4 Computation of Transportation and Related Expenses and Insurance Premium in the Dutiable Value of Imports

Article 35    Transportation and related expenses of imports shall be computed in accordance with the expenses paid or payable by the buyer. Where it is impossible to determine the transportation and related expenses of imports, the Customs shall examine and determine in accordance with the normal transportation costs of such imports during the same period.

In the case of importation of moving transportation vehicles into China, the Customs shall not compute transportation and related expenses separately in the examination and determination of dutiable value.

Article 36    The insurance premium of imports shall be computed on the basis of actual expenses paid. Where the insurance premium of imports cannot be determined or has not been incurred, the Customs shall compute the insurance premium on the basis of 0.3% of the aggregate "C&F" as follows:

insurance premium = (price of goods + freight charges) × 0.3%

Article 37    The postage of goods imported by mail shall be the transportation and related expenses and insurance premium.

Chapter 5 Dutiable Value of Exports

Article 38    The dutiable value of exports shall be examined and determined by the Customs based on the transacted price of the goods, and shall include the transportation and related expenses and insurance premium of the goods prior to loading before transportation to the place of exit in the People's Republic of China.

Article 39    The transacted price of exports shall mean the total price collected by the seller from the buyer directly and indirectly for the goods at the time of exportation of the goods.

Article 40    The following taxes and fees shall be excluded from the dutiable value of exports:

(1) export tariffs; and

(2) transportation and related expenses and insurance premium incurred for transporting goods listed individually in the price list to the place of exit in the People's Republic of China for loading.

Article 41    Where the transacted price of exports cannot be determined, the Customs shall, upon investigation of the status and price negotiation with the taxpayer, examine and determine the dutiable value of such goods in the following sequence:

(1) the transacted price of identical goods at the time of exportation to the same country or region at the time of exportation or roughly around the same time;

(2) the transacted price of similar goods at the time of exportation to the same country or region or roughly around the same time;

(3) the price computed on the basis of the costs, profits and general expenses (including direct expenses and indirect expenses) incurred for producing identical or similar goods in China, transportation and related expenses, and insurance premium incurred in China; and;

(4) a price determined in accordance with a reasonable method.

Chapter 6 Examination and Determination of Dutiable Value

Article 42    Taxpayers making a Customs declaration shall provide the invoice, contract, bill of lading, packing list, etc, to the Customs truthfully in accordance with the relevant provisions of these Measures.

Where required by the Customs, taxpayers shall also provide proof of payment in relation to the transaction of the goods and other commercial documents, written materials, and electronic data to prove that the price declared is true and accurate.

Where there is a price adjustment as stated in Section 3 of Chapter 2 made during the transaction of the goods, or where transportation and related expenses stated in Article 35 are incurred, the taxpayer shall make a Customs declaration truthfully.

Where the aforesaid price adjustment needs to be apportioned, the taxpayer shall make the apportionment in accordance with the objective and quantifiable standards and provide the basis of apportionment to the Customs simultaneously.

Article 43    The Customs may exercise the following official powers to carry out price check to verify the truthfulness and accuracy of declared prices:

(1) inspect or make copies of contracts, invoices, account books, proof of purchase and settlement of foreign exchange, documents, business correspondence, audio and video recordings and other commercial documents, written materials, and electronic data which indicate the relationship between the buyer and the seller and the transactions in relation to the exports;

(2) investigate into taxpayers engaging in importation and exportation and citizens, legal persons, or other organisations who/which have financial dealings or other business dealings with the taxpayers, and investigate issues relating to the import and export prices;

(3) inspect imports and exports or take samples for inspection or laboratory testing;

(4) enter the production and business premises of the taxpayers or storage premises of goods to inspect goods relating to importation and exportation activities and the status of production and business;

(5) upon approval by the director-general of the direct superior Customs or the director-general of the authorised subordinate Customs and presentation of the "Notice of the PRC Customs on Account Enquiry" (see Appendix 1) and the relevant work pass of the Customs personnel, the Customs may investigate into the financial dealings of the taxpayers in corporate accounts maintained with banks or other financial institutions and report to the banking regulatory authorities accordingly; or

(6) make enquiry with tax authorities on the status of tax payment in relation to the imports and exports in China.

When the Customs exercises the aforesaid powers, the taxpayers and the relevant citizens, legal persons, or other organisations shall state the truth and provide the relevant written materials and electronic data, and shall not refuse, delay, or hide the facts.

Article 44    Where the Customs has doubts over the truthfulness or accuracy of a declared price or is in the opinion that the special relationship between the buyer and the seller has an impact on the transacted price, the Customs shall issue a "Notice of the PRC Customs on Price Query" (hereinafter referred to as the "Notice of Price Query", see Appendix 2) and notify the taxpayer or its agent in writing of the reason for query. The taxpayer or its agent shall provide the relevant materials or other evidence in writing within five working days from receipt of the "Notice of Price Query" to prove that the declared price is truthful and accurate or that the special relationship between the buyer and the seller has no impact on the transacted price.

A taxpayer or its agent who has justifiable reason for not being able to provide the aforesaid materials within the stipulated period may apply to the Customs in writing during the stipulated period to apply for an extension of time.

Except under special circumstances, the extension shall not exceed ten working days.

Article 45    Upon issue of a "Notice of Price Query" by the Customs and under any of the following circumstances, the dutiable value of imports and exports shall be examined and determined in accordance with a method stipulated in Article 6 or Article 41 following a price negotiation between the Customs and the taxpayer:

(1) the taxpayer or its agent is unable to provide further explanations within the period stipulated by the Customs;

(2) upon verification of the relevant materials and evidence provided by the taxpayer or its agent, the Customs has reason to doubt the truthfulness and accuracy of the declared price; or

(3) upon verification of the relevant materials and evidence provided by the taxpayer or its agent, the Customs has reason to believe that the special relationship between the buyer and the seller has an impact on the transacted price.

Article 46    The Customs may omit to conduct a price query following examination if it is of the opinion that the imports do not have a transacted price and the dutiable value shall be examined and determined in accordance with a method stipulated in Article 6 following a price negotiation with the taxpayer.

The Customs may omit to conduct a price query following examination if it is of the opinion that the exports do not have a transacted price and the dutiable value shall be examined and determined in accordance with a method stipulated in Article 41 following a price negotiation with the taxpayer.

Article 47    Where the Customs has notified a taxpayer of a price negotiation in accordance with the provisions of these Measures, the taxpayer shall carry out price negotiation with the Customs within five working days from receipt of the "Notice of the PRC Customs on Price Negotiation" (see Appendix 3). Where a taxpayer has carried out price negotiation with the Customs with the period stipulated by the Customs, the Customs shall formulate the "Record of the PRC Customs on Price Negotiation" (see Appendix 4).

A taxpayer who fails to enter into negotiation with the Customs within the stipulated period shall be deemed to waive its right of price negotiation and the Customs may examine and determine the dutiable value of imports or exports directly in accordance with a method stipulated in Article 6 or Article 41.

Article 48    Under any of the following circumstance and upon application in writing by the taxpayer, the Customs may omit to conduct price query and price negotiation and shall examine and determine the dutiable value of imports or exports in accordance with a method stipulated in Article 6 or Article 41:

(1) goods under the same contract which are imported or exported in batches and the Customs has conducted valuation for a batch therein;

(2) the dutiable value of imports and exports is below RMB100,000 or the total amount of tariffs and import-linked taxes levied by the Customs is below RMB20,000;

(3) the imports or exports are dangerous goods, fresh goods, perishable goods, goods with short shelf life, defective products, out-dated products, etc.

Article 49    During the period of examination and determination of dutiable value of imports and exports by the Customs, taxpayers may provide guarantee to the Customs in accordance with the law before collecting the goods.

Article 50    Following the examination and determination of the dutiable value of imports or exports by the Customs, the taxpayer may apply in writing to request that the Customs provides a written explanation on how the dutiable value of imports or exports was being examined and determined. The Customs shall issue a "Notice of the PRC Customs on Valuation" (see Appendix 5) pursuant to the request.

Chapter 7 Supplementary Provisions

Article 51    The following terms used in these Measures shall be defined as follows:

"Domestic" shall mean within the People's Republic of China;

"Dutiable value" shall mean the taxable price used by the Customs for computation and levying of tariffs;

"Buyer" shall mean a natural person, legal person, or an organisation who/which makes payment for purchase of goods and undertaking risks and enjoying benefits thereto. A buyer of imports shall mean a buyer who imports goods from the People's Republic of China;

"Seller" shall mean a natural person, legal person, or an organisation who/which sells goods. A seller of imports shall mean a seller who exports to the People's Republic of China;

"Selling to the People's Republic of China" shall mean the act of shipping goods into the People's Republic of China whereby the ownership and risks of the goods are transferred from the seller to the buyer and payment from the buyer to the seller in relation thereto;

"Paid or payable price" shall mean the total price paid directly or indirectly by the buyer for purchasing the imports, i.e. all amounts paid or to be paid by the buyer to the seller to satisfy the seller's terms of sale of the imports or to a third party for performance of the seller's obligations;

"Indirect payment" shall mean payment of all or part of the price of the goods from the buyer to a third party pursuant to the seller's request or to offset other financial dealings between the buyer and the seller;

"Procurement commission" shall mean the labour fee paid by the buyer to its procurement agent for purchasing the imports;

"Brokerage" shall mean the labour fee paid by the buyer to a broker who represents both the buyer and the seller for purchasing the imports;

"Identical goods" shall mean goods produced in the same country or region as the imports and identical in physical nature, quality, and reputation, etc, save for superficial minute variance;

"Similar goods" shall mean goods produced in the same country or region as the imports and although not identical in all aspects, having similar features, similar composition materials, and identical functions, and being commercially exchangeable goods.

"Around the same time" shall mean a period of 45 days before and after acceptance by the Customs of the declaration for the goods. Where the dutiable value of imports is examined and determined in accordance with the chargeback price method and if the imports or identical or similar goods are not sold in China within 45 days before and after acceptance by the Customs of the declaration for the goods, the period of domestic sale may be extended up to within 90 days before and after acceptance of the declaration for the goods;

"Recognised accounting principles" shall mean the commonly complied accounting principles and accounting methods in the relevant countries or regions, including the accrual principle, matching principle, historical cost principle, allocation of revenue and capital expenditure principle, etc, for determination of value of the goods;

"Royalties" shall mean fees paid by the buyer of imports to an intellectual property rights holder or persons duly authorised by the rights holder for licensing or transfer of patent rights, trademark rights, proprietary technologies, copyrights, distribution rights, or selling rights;

"Technical training expenses" shall mean training, food and accommodation, transportation, medical insurance, etc, and other expenses for training personnel paid by the buyer of the imports in respect of the relevant technical training to the buyer given by the training personnel assigned by the seller or a third party related to the seller;

"Software" shall refer to data processing procedures and files stipulated in the Regulations on Computer Software Protection;

"Proprietary technology" shall mean undisclosed workflow, formula, product design, quality control, testing and knowledge, experience, methods, and know-how of marketing management, etc, in the form of drawings, models, technical information, and norms, etc;

"Mild processing" shall mean dilution, mixing, classification, simple assembly, repackaging, or other similar processing;

"Same grade or type of goods" shall mean a class or series of goods produced by a specific industry or department, including identical goods or similar goods;

"Medium" shall mean magnetic tape, magnetic disk, and optic disk;

"Price check" shall mean the duties as set out in Article 43 performed by the Customs for determination of the dutiable value of imports and exports in accordance with the law, examination of documents, data verification, inspection of physical goods and the relevant account books, etc, and examination of the truthfulness and accuracy of transacted prices of imports and exports declared and whether there is a special relationship between the buyer and the seller which has an impact on the transacted price;

"Price negotiation" shall mean the exchange of data between the Customs and a taxpayer for determination of dutiable value on the basis of keeping commercial secrets confidential and using a method other than the transacted price valuation method;

"Prior to unloading" shall mean prior to commencement of unloading of goods; and

"Prior to loading" shall mean prior to commencement of loading of goods.

Article 52    Taxpayers who disagree with the valuation decision of the Customs shall pay tax in accordance with the relevant administrative decision of the Customs and may apply for review with the higher-level Customs. Taxpayers who disagree with the review decision may file an administrative lawsuit with the People's Court.

Article 53    Violations of the provisions of these Measures which constitute smuggling or violation of supervision and control provisions of the Customs shall be dealt with the Customs in accordance with the relevant provisions of the Customs Law of the People's Republic of China and the Implementation Regulations of the PRC Customs for Administrative Punishment; where the case constitutes a criminal offence, criminal liability shall be pursued in accordance with the law.

Article 54    The General Administration of Customs shall be responsible for the interpretation of these Measures.

Article 55    These Measures shall be effective from 1 February 2014. The Measures of the PRC Customs on Determination of Dutiable Value for Imports and Exports promulgated via General Administration of Customs Order No. 148 on 28 March 2006 shall be repealed simultaneously.