Q:
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Under what circumstances will Customs issue a "Notice of Price Challenge by Customs of the People's Republic of China"?
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A:
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When the Customs has doubts about the authenticity and accuracy of the declared price or believes that the special relationship between the buyer and seller affects the transaction price, it will issue the Notice of Price Challenge of the Customs of the People's Republic of China ("Customs Price Challenge Letter") to inform the taxpayer or his agent of the reasons for the challenge.
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Q:
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What should the tax payer or his agent do when he receives the Notice of Customs Price Challenge?
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A:
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The tax obligor is obliged to give full cooperation in accordance with the requirements of the Customs and the prescribed period. Specifically, the tax obligor or its agent shall provide relevant information or other evidence in written form within 5 working days from the date of receipt of the Notice of Customs Price Challenge to prove that its declared price is true and accurate or that the special relationship between the buyer and seller has not affected the transaction price.
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Q:
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Does the receipt of a Notice of Customs Price Challenge mean that a customs valuation will definitely be made?
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A:
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No. The Customs exercise of the price challenge procedure will generally go through the following steps.
Raising the reasons for the challenge
Issue the Notice of Customs Price Challenge and request the taxpayer to respond in detail to the reasons for the challenge
The taxpayer or agent to provide relevant information and relevant evidence as required
Customs review the relevant feedback received to determine the next steps
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Q:
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After issuing the Notice of Customs Price Challenge, what are the general results of the Customs audit?
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A:
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Notification of the situation, after the customs price challenge, the following situations and results may occur.
After review to determine the declared price in line with the definition of the transaction price, conditions, the transaction price as the basis for determining the duty-paid price
The transaction price adjustment (add or subtract items) to determine the duty-paid price
In accordance with the transaction price method other than the valuation method to determine the tax-paid price
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Q:
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After receiving the Notice of Price Challenge, under what circumstances will the Customs use a method of valuation other than the transaction price method?
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A:
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In the following three cases, the Customs does not accept the declared price, the use of valuation methods other than the transaction price method of valuation: 1.
The tax payer or his agent fails to provide further explanation within the period specified by the Customs
The taxable person or his agent provides relevant information and evidence within the prescribed period, and the Customs still has reason to doubt the authenticity and accuracy of the declared price after examination
The taxable person or his agent to provide relevant information and evidence within the prescribed period, the customs audit still has reason to believe that the special relationship between the buyer and seller affects the transaction price.
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