The Tauritus Judgment: A Benchmark for Customs Valuation in the Case of Provisional Prices

Background to the Tauritus Judgment

Between October 2015 and April 2017, the Lithuanian company Tauritus imported diesel fuel and jet fuel (kerosene) into the EU. In its customs declarations in Lithuania, these goods were declared on the basis of provisional prices, as set out in purchase contracts and pro forma (i.e. unofficial, provisional) invoices.

The final price for the fuels was determined only after importation, based on market prices and exchange rates over a pre-agreed period. This mechanism was contractually agreed with the suppliers. The final price could be either higher or lower than the provisional price. The determination was recorded in annexes to the purchase contracts, after which final invoices were issued.

In its import declarations, Tauritus used the provisional price as the customs value, determined on the basis of data available within the Union, applying the so-called “fall-back method.” The company used the simplified declaration procedure permitted under the UCC. Upon receipt of the final invoices, Tauritus usually submitted requests to amend the customs value stated in its declarations.

However, during a post-clearance audit it was found that, for thirteen consignments, Tauritus had not requested any change to the customs value, even though the final invoices showed a higher price than the provisional value in the simplified declarations. The Lithuanian customs authorities then applied the transaction value method in Article 70(1) UCC, taking the prices on the final invoices as the customs value. This resulted in additional assessments of import VAT and interest for late payment.

Tauritus challenged this decision, leading the highest Lithuanian administrative court to refer two questions to the CJEU for a preliminary ruling.

Preliminary questions from the referring court

The Lithuanian court asked whether Article 70(1) UCC must be interpreted as meaning that the transaction value method cannot be applied where, at the time of acceptance of the customs declaration, only a provisional price is known, which is later – on the basis of objective criteria – adjusted to a final price beyond the control of the parties.

The court also asked whether customs authorities must be proactively informed of price adjustments made after the release of the goods.

Judgment of the Court of Justice

Transaction value remains the primary method

The Court confirmed that the transaction value method applies even where provisional prices are used, provided that the price is determined through objective pricing mechanisms and the simplified declaration procedure is used. Once the final price becomes known, a supplementary declaration must be lodged.

EU customs legislation seeks to ensure a fair, uniform and neutral system for determining customs value, excluding arbitrary or fictitious values. The transaction value method is the primary method of valuation; the other methods are subsidiary and may only be applied where the transaction value cannot be used. The UCC expressly provides for a strict hierarchy among the valuation methods. Where the transaction value method can be applied, it must be applied – there is no choice in the matter.

In this case, the contractual arrangements provided for a mandatory revision of the provisional price based on objective and pre-determined factors outside the control of the parties. The final price was therefore ascertainable from the moment the agreement was signed. The situation described in Article 70(3)(b) UCC – where the price depends on a condition for which no value can be determined – did not arise here.

The fact that the final price was not known at the time of acceptance of the declaration does not preclude the use of the transaction value method. It is sufficient that the contract stipulates that the price will be mandatorily revised based on objective factors beyond the parties’ influence. The CJEU pointed to the wording of Article 70 UCC: the transaction value is not only the price actually paid but also the price “payable” for the goods.

The Court concluded that, in the circumstances of Tauritus, the customs value had to be determined using the transaction value method, applying the simplified procedure under Articles 166 and 167 UCC. The second question was not answered.

Relationship with the Hamamatsu Judgment

The Court stressed that its ruling in Hamamatsu (C-529/16) remains valid but is not comparable. Hamamatsu concerned transfer pricing within a corporate group, where profits were allocated retrospectively based on internal criteria – without an objective basis.

By contrast, Tauritus involved contractually agreed, verifiable calculations based on objective factors independent of the contracting parties. The judgment clarifies that the UCC accommodates modern, realistic pricing schemes.

Practical implications for businesses

Importers may continue to use price formulas, provided these are predetermined, objective, and transparent. They must use the simplified declaration procedure and lodge a supplementary declaration as soon as the final price is known.

Conclusion

Tauritus fills gaps left by Hamamatsu and aligns with international guidance such as WCO Technical Case Study 14.4, which accepts objectively justified pricing formulas.

The judgment marks an important benchmark in customs valuation practice. It confirms the importance of transparent, objective price determination and creates room for flexible, formula-based valuations. For businesses, this means contractual arrangements must be clear and precise, and pricing must be based on objective criteria beyond the control of the parties.