Uncertainty reigns over the impact of post-entry adjustments of provisional customs values, mainly in the context of retroactive transfer pricing adjustments.

Part of this uncertainty stems from the landmark Hamamatsu case (C-529/16) of 20 December 2017. Though the Court of Justice of the European Union (“CJEU”) had the chance to provide more clarity on the customs treatment of retroactive transfer pricing adjustments, the outcome only provided partial guidance while leaving room for altering interpretations among EU Member States. In practice, we see that the Customs authorities of the various EU Member States drew varying conclusions from the Hamamatsu case, leading to legal uncertainty for taxpayers.

However, some hope for clarity on the matter may come  from two pending cases.

Firstly, a case is pending before the German Federal Fiscal Court (Bundesfinanzhof) addressing the customs treatment of upward retroactive transfer pricing adjustments. In this particular case, often referred to as ‘Hamamatsu II’, the German Federal Fiscal Court could potentially refer preliminary questions to the CJEU (BFH – VII R 36/22).

Second, a Lithuanian court has referred a case to the CJEU regarding the customs treatment of post-entry upward and downward price adjustments. In this case (C-782/23), an importer used provisional prices for imported diesel and jet fuel, then later adjusted these prices based on market conditions and exchange rates. Customs officials argued that the importer should have adjusted the provisional customs values on the customs declarations by applying the transaction value method.

The Lithuanian court is now asking the CJEU whether the transaction value method can be used where the final price is unknown at the moment of import. The court would further like to understand whether the importer should have adjusted the customs declaration once the price became final.

With these cases pending, we are hopeful that the CJEU decisions in the near future will provide for more clarity on the customs treatment of post-entry (transfer) price adjustments.

In our latest discussions with the EU Commission, Baker McKenzie stressed that businesses and operators active in Europe require more alignment between the different Member States on the treatment of retroactive (transfer) price adjustments. It would benefit all parties to have a process which is operational throughout the EU and allows operators to repot these adjustments efficiently to local authorities who will share the same interpretation of the matter.

Link to the preliminary ruling request: https://curia.europa.eu/juris/showPdf.jsf?text=&docid=282645&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=5533328


Thomas joined Baker McKenzie as a Senior Trade Advisor in the Tax Practice Group in April 2022. He has 10+ years of experience in the field of Customs, International Trade and Implementation of Duty Optimization Programs. Thomas is a guest lecturer at the University of Antwerp (UAntwerp) and holds a US Customs Broker License.


Frits Pasch is a Junior Associate within Amsterdam Indirect Tax team. He joined the firm in January 2021.