Application of customs between related entities in international business

Abstract

In modern business conditions, conditions of globalization, there are more and more transnational companies that transfer their operations outside their home country and thus achieve a competitive advantage. A large part of the total foreign trade commodity exchange takes place between mutually related persons (e.g. between a foreign company and its daughter company, general representative, dealer, etc.), which more and more often leads to contracting prices that are the result of conditioning or restrictions. Transfer prices that cannot be realized in a business relationship of unrelated persons under free market conditions are also agreed upon. In cases where the customs authority suspects that the existence of any of the aforementioned relationships has influenced the agreed price, it will, respecting the customs regulations, proceed to determine the real value of the goods in order to apply the customs rate stipulated in the Customs Tariff, calculate the tax and apply other foreign trade restrictions. Otherwise, certain business entities will be in a position to place goods on the domestic market under more favorable conditions, achieve a dominant position and disrupt the market balance. In the paper, the authors deal with the problem of determining the actual customs value and the application of customs regulations in view of the growing trade between related parties. This issue is economically and legally delicate because the correct determination of the customs value protects the economic space of a country and vice versa the interests of importers.