The practice of customs authorities to include dividends in the customs value of goods is evolving and giving rise to questions among all companies engaged in foreign trade. The Russian Ministry of Finance has published the Letter No. 27-01-21/11349 of 10.02.2025, in which it clarifies the procedure for including dividends in the customs value of goods and offers an alternative mechanism for the voluntary inclusion of dividends in the customs value.
Conditions for the inclusion of dividends
According to the clarifications, dividends can only be included in the customs value if the price of the goods does not correspond to the market value. The declarant must confirm the market level of the price, and the customs authority must verify the pricing method. This is an important clarification, as customs authorities have often ignored the need for such verification in the past.
However, there are a number of problems with the clarifications:
- Analysis of the dependence between profits and dividends: the Ministry of Finance has not explicitly stated that customs authorities must take into account not only the relationship between suppliers and buyers, but also the dependence of dividends on profits from the sale of goods, as the courts have repeatedly pointed out;
- Confirmation of the market level of the price: it is unclear what approaches can be a used by a declarant, including whether the use of transfer pricing documentation would be acceptable;
- Risk of automatic inclusion of dividends: the clarifications allow for the interpretation that, in the absence of data on pricing, customs may include the full amount of dividends without further analysis. This contradicts the practice of the Supreme Court of the Russian Federation and the EAEU Court, as well as the EAEU Customs Code.
Alternative mechanism
The Ministry of Finance has proposed the possibility of voluntary inclusion of dividends in the customs value (through deferred determination of the customs value). However, the EAEU Customs Code only allows this approach if the relationship between the supplier and the buyer does not influence the price. Since this condition contradicts one of the reasons for including dividends, the practical applicability of the mechanism remains questionable.
Despite the positive step of confirming the need to analyze pricing, the clarifications also create legal uncertainty, especially for companies operating under the “low-risk distributor model.”