Establishing the Customs Value
This page provides information about the valuation methods used to derive the customs value of both new and used dutiable motor vehicles.
Excise duty and Goods and Services Tax are levied on the customs value of dutiable motor vehicles. Examples of such vehicles include passenger cars, motorcycles and motor scooters.
New Motor Vehicles
Transaction Value Method
The transaction value method is first considered in establishing the customs value, which is the Cost, Insurance and Freight (CIF) value under incoterms.
To establish the customs value under this method, all other charges incidental to the sale and delivery of the motor vehicle must be added to the transaction value or the price paid or payable for the motor vehicle. Examples of these charges include selling commissions, assists (materials supplied by the importer), packing costs, proceeds of resale accruing to the seller, royalties and licence fees, freight and insurance charges.
If any component of the customs value is settled in a foreign currency, that value should be converted to Singapore Dollars using the current selling rate of that currency in Singapore, at the time when customs duty or excise duty is paid for the imported goods.
Example on the calculation of the customs value:
Company A bought a new car from Supplier B on EXW (Ex-Works) incoterms.
Cost of new car = S$20,000
Cost of inland transportation to port of exportation = S$300
Handling and document charges at port of exportation = S$100
Cost of overseas freight = S$500
Cost of insurance for shipment = S$100
Therefore, the customs value should be the sum of all the costs above, which is S$21,000.
Conditions for Transaction Value Method
Using the transaction value method by Singapore Customs is subject to these conditions:
- There must be evidence of a sale. Such evidence may be in the form of commercial invoices, sale contracts, purchase orders, etc.
- There must not be restrictions on the use of the goods by the buyer.
- The sale or price is not subject to conditions for which a value cannot be determined with respect to the goods being valued. Examples include:
- Seller establishes the price of the imported goods on condition that the buyer will also buy other goods in specified quantities
- Price of semi-finished goods is established by the seller on condition that the buyer will give the seller a specified quantity of the finished goods
- It must be shown that the transaction value has not been affected by any relationship between the importer and supplier.
Other Valuation Methods
If the transaction value method cannot be used, the following alternatives will be used to determine the customs value:
- Identical or similar goods value - the transaction value of identical or similar goods sold for export to Singapore.
- Deductive value - the sale price of the goods in Singapore, adjusted for costs incurred after shipment.
- Computed value - the value based on cost of production, general expenses and profits in the country of origin of the imported goods.
- Residual valuation - the value determined by Singapore Customs, based on flexible interpretation of all the previous methods.
Used Motor Vehicles
The customs value of used motor vehicles will depend on the following scenarios:
Individual owner purchased and used a vehicle in the country of export before importing into Singapore
Depending on the age and condition of the vehicle, Singapore Customs might apply depreciation on the original purchase price. The customs value of the used vehicle would then be the sum of the depreciated purchase price, overseas freight and insurance costs, and all other costs incidental to the delivery of the vehicle to Singapore, such as handling and storage costs.
If any component of the customs value is settled in a foreign currency, that value should be converted to Singapore Dollars using the current selling rate of that currency in Singapore, at the time when customs duty or excise duty is paid for the imported goods..
Individual owner or a company importing used vehicles that are purchased from other dealers prior to import
The customs value would be established the same way as new motor vehicles.