Cargo Online Pty Ltd

Valuation

Valuing Your Vehicle for Customs

Due to the complexity of the Customs Value determinations we recommend each case be investigated individually to determine the most appropriate in your particular case.

The Customs Value of an imported private motor vehicle is assessed by one of the following methods:

1. NORMAL METHOD OF VALUATION

(called ‘Normal’ but not normally used by Customs)

The Customs Value for Vehicles purchased before 2nd March 1998 (or if when purchased the sale under consideration took place with the purpose of shipping it to Australia for Vehicles purchased after 1st March 1998) is normally assessed as the Purchase Price actually paid for the vehicle in the originating country, less an allowance for depreciation if the vehicle was purchased prior to 2nd March 1998. This allowance is deducted from the Purchase Price and is calculated at a maximum of 76% depreciation for vehicles owned for more than 6 years.

NOTE- this method of valuation is not ordinarily used in cases where:

• Satisfactory evidence cannot be presented (invoices, receipts and documents) to Customs at the port of importation to verify the vehicle purchase price.
• The vehicle was purchased in the originating country at only a token or nominal price.
• Use of the depreciation allowance outlined above would result in an unrealistic Customs Value for the vehicle.
• The vehicle value alters considerably between the dates of its purchase in the originating country and its importation into Australia, due to the addition of significant accessories, fittings or options, major restoration, modifications or any improvements (excluding any necessary running repairs and maintenance) to the vehicle during that time, or significant damage (as opposed to normal wear and tear) caused after the purchase of the vehicle.
• The vehicle was not purchased in an actual sale but was otherwise acquired, such as by donation, gift, prize of bequest or was personally built wholly or in part.

In nearly all circumstances, for vehicles purchased in the originating country after 1st March 1998, the sale under consideration (car purchase) did not take place with the purpose of exporting it to Australia and so for 90% of car owners, the following will apply:



2. ALTERNATIVE METHOD OF VALUATION

(called ‘Alternative’ but is more normally used by Australian Customs)

Where the normal method of valuation is not used, then the Customs Value will generally be assessed using the Fall Back Deductive method. This involves obtaining an ‘Australian Landed Valuation’, as imported, and as valued by an independent Australian Motor Specialist less the cost of shipment and the figure remaining is deemed to be the ‘Customs Value’ upon which Duty and GST is levied. The Importer is responsible for obtaining, as well as the cost of, the ‘ landed’ valuation.

In the majority of circumstances that the Australian Customs Service applies the ‘landed cost’ valuation method; it has normally been found that valuations of cars whilst they are still ‘As Landed’ sitting at the Australian Port have been very much lower than the actual ‘Market Value’ of the Vehicle once it has been imported, had duties / taxes paid and has been made roadworthy and registered.

An expert appraiser may at first consider the Market Value of a similar vehicle in Australia and make a significant reduction for the fact that the vehicle will not have an Australian Compliance Plate fitted. From this figure can be deducted costs to land the vehicle and then deducting the 10% GST and then the 10% Duty. From the remaining figure Customs would allow deduction of all the costs of shipping the car to Australia to arrive at the ‘Customs Value’. The resulting ‘Customs Value’ can be as low as 50% of the actual ‘Australian Market Value’.

In many instances this method of valuation results in a fair assessment for taxes payable as quite often it seems to equate to a figure very similar to the originating country Value at the time of shipment rather than the probable higher originating country price paid when the vehicle was originally purchased that may have been applied under the ‘Normal Method of Valuation’.

We will appoint an approved valuer at destination that will be able to give an indication of an ‘As Landed Value’ to enable an estimate of taxes to be ascertained.

A rough initial guide can be assessed from the New & Used Australian Market Values on the Internet at: www.redbook.com.au , www.drive.com.au and at www.autotrader.com.au.