Deductive Value Method

The Deductive Value Method is a customs valuation method used to determine the dutiable value of imported goods. It is typically applied when the transaction value method, identical goods transaction value method, or similar goods transaction value method cannot be used. Its core principle is to work backwards from the resale price of the imported goods in the first domestic sale (usually wholesale or retail price), deducting import duties, domestic taxes, freight, insurance, commissions, profits, and general expenses to arrive at the CIF value. It is commonly used when customs questions the declared price, or in special transactions such as intra-group transfer pricing, consignment, and leasing. Note: It must be based on the actual resale price, and the resale must occur within 90 days of importation; if the resale price involves multiple stages, reasonable apportionment is required. Difference from other terms: Unlike the Computed Value Method (which builds up from production costs), the Deductive Value Method deducts backwards from the sales end; it also differs from the Transaction Value Method, which is based on the actual price paid or payable.