Fourth: The Transaction Value of the goods being Valued:

• The customs value of goods imported into the GCC countries is the transaction value, that is: the price actually paid or payable when those goods are sold for export to the GCC countries. Taking into account the provisions of Paragraph (B) of this Foundation, and in accordance with the following conditions:

1. There should not be any restrictions on the disposal or use of the imported goods by the buyer, other than the restrictions stipulated in this system, or those that specify the geographical areas in which the goods can be resold, or restrictions that do not have a significant impact on the value of the goods.
2.  The sale or price must not be linked to a specific condition or subject to a description whose value cannot be determined for the goods being valued.
3. The seller shall not be entitled to any part of the proceeds of the resale, disposal, or use of the goods at a later stage by the buyer, directly or indirectly, unless it is possible to make an appropriate adjustment to the value in accordance with the provisions of paragraph (b) of this basis.
4. The seller and buyer are not related in accordance with Paragraph (Second / 5) of this Article, but if they are related. The value of the transaction will be acceptable for customs purposes in accordance with the provisions of Paragraph (A) of this basis if one of the following is true:
   

1. If a study of the circumstances of the sale proves that the relationship between the buyer and the seller did not affect the price actually paid or agreed to be paid.
2. Or if the transaction value of the imported goods is very close to one of the standard days (test) described in the following paragraphs:
   

1. The transaction value of identical or similar goods sold to buyers not associated with the GCC countries.
2. A customs value determined for identical or similar goods under Paragraph (Sixth) “Inferential Value."
3.  A customs value determined for identical or similar goods under Paragraph (Seventh) “Calculated Value."
   

Fifth: The Customs Value :

1. The transaction value of identical goods previously accepted as the transaction value under Paragraph (Fourth) of this Article, exported to the GCC countries on or near the same date of export of the goods being valued, at the same commercial level and in the same quantities as the imported goods being valued. If such a value is not available, the transaction value of identical goods sold at a different commercial level and/or in different quantities shall be used, adjusted to take into account the difference in commercial level and/or quantities, based on objective data in accordance with Paragraph (Second/11) of this Article. And confirmed evidence proving the reasonableness of the amendment, whether the amendment leads to an increase or decrease in value, taking into account the difference in costs referred to in Paragraph (Fourth / B / 1) of this Article. If there is more than one transaction value for identical goods, the lowest of these values shall be approved as the customs value of the goods being valued, in accordance with Paragraph (Fifth/A) in the Explanatory Appendix.
   
    
   
2. The transaction value of similar goods previously accepted as the transaction value under Paragraph (Fourth) of this Article, exported to the GCC countries on or close to the same date of export of the goods under valuation, at the same commercial level and in the same quantities as the imported goods under valuation. If such a value is not available, the transaction value of similar goods sold at a different commercial level and/or in different quantities shall be used, adjusted to take into account the difference in commercial level and/or quantities, on the basis of objective data in accordance with Paragraph (Second/11) and confirmed evidence proving the reasonableness of amendment, whether the amendment leads to an increase or decrease in value, taking into account the difference in costs referred to in Paragraph (Fourth / B / 1) of this Article. If there is more than one transaction value for similar goods, the lowest of these values shall be approved as the customs value of the goods being valued, in accordance with Paragraph (Fifth/B) of the Explanatory Appendix.

Sixth: Inferential Value :

·         1- The customs value is based on the unit price at which the imported goods, identical goods, or similar goods are sold, at the first commercial level, in the local market in the GCC countries, in their condition upon import, in the largest total quantity in accordance with Paragraph (Second / 8) of this Article. At the same time or close to the import of the goods being valued, to unrelated persons in accordance with Paragraph (Second / 5) of this Article, excluding the sale of goods in the production of which any of the auxiliary items described in Paragraph (Fourth / B / 1 / 4) ) of this Article, provided that the following deductions are made:
 
A.      as for the amount of commissions (usually paid or agreed upon), or the amounts that are usually added against profits and general expenses in the GCC countries for goods of the same category or type.
B.      The usual fees for transportation and insurance after importation and the associated costs in the GCC countries. Provided that these costs are not added as general expenses under paragraph (A) above.
C.      Customs duties and other taxes or zakat owed in the GCC countries due to importing or selling goods locally. It must be taken into account that these taxes or zakat are not deducted under this paragraph if the importer registers them among the general expenses in paragraph (A) above on this basis.
 
·         2- If the goods being valued, identical goods, or similar goods imported were not sold in their condition upon import at the same time as the import of the goods being valued or close to that time, the customs value, taking into account the provisions of Paragraph (1) of this Basic, shall be based on the unit price at which The imported goods, identical goods, or similar goods imported into the local market in the GCC countries shall be sold in their condition upon import as soon as possible after the import of the goods being valued, provided that this is done before (90) days have passed from the date of import of the goods being valued, in quantities sufficient to determine the unit price.
 
·         3- If the imported goods, identical goods, or imported similar goods have not been sold in the local market in the GCC countries, in their condition upon import, then the customs value shall be based, upon the importer’s request, on the price at which the unit of the imported goods is sold in the local market in the GCC countries. After additional manufacturing or processing has been carried out on it, unless it loses its identity, in the largest total quantity, between unrelated persons as defined in Paragraph (Second / 5) of this Article, taking into account the deduction of the value that was added as a result of additional manufacturing or processing, and the deductions stipulated in Paragraph (1) of this basis.

Seventh: Calculated Value:

·         1- If the customs value cannot be determined by Paragraph (Sixth) of this Article, or if the importer requests that the calculated value be applied before the inferential value by Paragraph (Third/B) of this Article, the customs value is based following the provisions of this Paragraph on the value Calculated consisting of the following:
 
A.      The cost or value of the materials, manufacturing, or other preparing and processing work that went into the production of the imported goods.
 
B.      The amount of profit and general expenses of the product, equivalent to the amount normally reflected in sales of goods of the same category or type of goods whose value is being determined, manufactured by other producers in the same exporting country, for export to the GCC countries.
 
C.      The wages and costs specified in Paragraphs (7) and (8) of (Fourth / B / 1) of this Article.
 
·         2- It is not permissible to ask any person residing outside the GCC to submit for examination any accounts or records to determine the calculated value or to allow access to them. However, the customs administration may verify in another country the information provided by the producer of imported goods, to determine the customs value by the provisions of this article, with the producer’s approval, and on the condition that sufficient advance notice is provided to the government of the country in which the investigation is taking place, and that it does not object to that.

Eighth: The Flexible Method:

·          If it is not possible to determine the customs value of imported goods according to the previous bases referred to in paragraphs (fourth) through (eighth) of this article, the provisions of the same bases shall be applied again consecutively, with a reasonable degree of flexibility, until the customs value is reached according to the first possible basis.
·         If the customs value is not reached using these principles, even in its flexible form, it is permissible to use reasonable methods that do not conflict with the general principles and provisions of the value agreement, and with Article Seven of GATT 1994, and on the basis of data available to any party in the GCC countries. The customs value may not be determined based on the following:
 
1.        The selling price in the GCC countries for goods produced in the GCC countries.
2.       The value is higher than alternative values.
3.       The selling price of the goods in the local market in the country of export.
4.       A cost of production other than the calculated value determined in accordance with the provisions of Paragraph (Seventh) of this Article.
5.       The price of goods sold for export to a country other than the GCC countries.
6.       Random or arbitrary values.
7.       Minimum limits of customs value.
 
·         The importer must be informed in writing, upon his request, of the principles approved in determining the customs value by the provisions of this Article. The clarification includes only the imported goods being valued and does not serve as a reference for the valuation of imports of any other good with the same or other entry customs. This procedure is only for information purposes and does not affect or replace the appeal procedures mentioned in Paragraph (First/2) of this Article.

Ninth: This formation annex forms an integral part of this article:

1. Formation Annex
   Article number – Notes
   1-      First / 5: Credit balances related to previous consignments are not considered when determining the customs value of the goods yet to be valued.
   Example: An importer received a consignment contains television sets worth 10,000 riyals, and the invoice included an amount of 9,000 riyals as the value of the devices, and a balance of 1,000 riyals. The importer explained that the balance of the 1,000 riyals was granted to him as compensation for the damage on ten television sets from the previous shipment.
   In this case, the balance is not corelated to the consignment being valued, therefore the customs value of the consignment is set at 10,000 riyals.
   •         Fourth/A: The price paid or the payable price:
   1-      In the process of determining the value of a certain transaction, the price paid or the payable price as defined in Paragraph (Second/1) of this Article. Regardless of how the amount was derived, whether it being a result of discounts, additions, or negotiations. The price  paid or the payable price may be concluded by applying a specific equation to it.
   2-     The phrase “Payable price” defines as: The price of the goods that has not been paid when the customs determined the customs value of the imported goods, and the agreed upon paid price will be set on the basis of determination of customs value. The payment does not need to be made in the form of transferring the amount, it may be made in the form of letters of credit or financial bonds, directly or indirectly.
    
   3-    Indirect payment: includes a debt settlement from the buyer to the seller fully or partially, or the buyer obtains a discount in the price of imported goods yet to be valued, as a method of debt payment to the seller. Activities made by the buyer at his expense such as advertisement, unless activities stated in (Fourth/B) although it benefits the seller as well, is not included in the indirect payment. The cost of those activities shall not be added to the price paid not the payable price in process of determination of the customs value for imported goods.
    
   4-    - Combined goods: The price paid or the payable price may represent an amount for the combination of the imported goods. The price paid or the payable price is calculated by adding the value of the components and combination itself.
   Example: An importer previously supplied a foreign combining plant with components ready for combination, and their value or cost at the combining plant amounts to (1) riyal per unit. The importer pays the combining plant half a riyal per unit in exchange for combination. So, the transaction value for one combined unit is (1.50) riyals.
   • Fourth / A / 1: Restrictions that do not impact the value of goods significantly, shall not prevent the customs value from being determined using the transaction value approach, for example:
   1- Restrictions that determine a specific date for the sale of the imported goods.
   Example (1): An importer purchased goods of clothing, and it became clear from the contract of purchase that the seller stated that, the buyer (importer) cannot sell the clothes except on a certain date, such as the beginning of winter, for example.
   2-     Restrictions that determine a specific location in the importing country for the resale of the imported goods.
   Example (2): Taking into account Example (1), if the seller had stated that the buyer (importer) cannot sell the goods except in the city of Riyadh, for example.
   3- Restrictions that determine a specific method of resale in the importing country.
   Example (3): If the seller in Example (1) specified that the buyer (importer) can sell the goods through sales representatives only, or through advertisements in the media.
   • Fourth / A / 2: Conditions or considerations where a value cannot be determined:
   For example, the seller determines the price of the imported goods on the condition that the importer also buys other goods in specific quantities, or that the price of the imported goods depends on the price or prices at which the importer sells other goods to the seller of the imported goods, or that the seller determines the price of the imported goods on the basis of the form of payment used which is not intrinsically related to the goods, such as: if the goods are subjected to further manufacturing by the buyer, and the seller specified that the buyer will receive a certain quantity of the goods after the manufacturing process.
   • Fourth / A / 4: If customs has sufficient detailed information about the buyer and seller for the customs to be convinced that the relationship between them did not affect the price paid or the payable price, the price is then accepted without requesting additional information from the importer. However, if customs has doubts that the connection between the buyer and the seller has affected the price, the customs then must inform the importer of the matter. The importer will be given sufficient time to respond, and the notice must be written if was requested by the importer.
   • Fourth / A / 4 / A: The value of the transaction shall be accepted, after reviewing the circumstances of the sale, if the customs finds that:
   1-       Although the buyer and seller are related, they buy and sell to each other as two unrelated individuals.
    
   2-     If the value is determined in a way that is consistent with normal practices in the determination of prices in a particular industry, these are considered indications that the price was not affected by their relationship.
   3- If it is proven that the price is sufficient to cover all costs, in addition to the profit, and it is similar to the company's total profits achieved in a certain period of time, from total sales of the same category or type.
   Fourth / A / 4 / B: Standard (Test) Values:
   1-      They are values that are ​​previously accepted as customs values ​​for goods that were exported to the GCC states at the time of importation of the imported goods, or a period close to it. Standard values ​​are used for comparison only with the transaction value of imported goods.
   2- To determine whether the value of the transaction is close to the standard (test) value, the following factors are considered:
   (a) The nature of the imported goods and the field of the industry.
   (b) The period of importation of the goods.
   (c) Is the difference in value commercially significant?
   (d) Is the difference in value attributable to internal shipping costs in the country of export? Since the mentioned factors may vary. A unified standard such as a specific percentage cannot be applied in every situation. As a slight difference in the value of a particular type of goods may be unreasonable, while a significant difference in value of another type of goods may be reasonable.
   3- When applying standard values, the differences between the declared value and the standard value is taken into consideration. The differences are settled if they are based on objective data provided by the buyer or available to the customs. The differences may relate to:
   (a) The commercial level of the importer.
   (b) The quantity of imported goods or contracted for.
   (c) The costs mentioned in Paragraphs (7) and (8) of (Fourth / B / 1) of this Article.
   (d) Costs incurred by the seller in sales, where the buyer and seller are not related. It is not incurred by sales in which the buyer and seller are related.
   4- If it appears from the result of comparison or test that one of the standard values ​​stated in (Fourth / A / 4 / B) of this Article, is close to the declared value, it is not necessary to resort to reviewing the circumstances of the sale to determine whether the relationship between the buyer and the seller affected the price or not.
   If customs has sufficient detailed information to be convinced without further investigation that one of the standard (test) values ​​is close to the declared price, then it does not oblige tp the importer for proving the validity of the standard value.
   • Fourth / B / 1 / 1: Purchase commission: It is the expenses paid by the importer to his agent in exchange for his representation services abroad to purchase the goods whose value is being determined. And it is not included in the customs value.
   Sell commission: They are expenses paid to the seller's agent who is associated with, subject to, or acting for or on behalf of the manufacturer or seller, in exchange for services for the sale of the goods.
   Fourth / B / 1 / 4:
   A - Requirements for adding the value of auxiliary items:
   1- If it has not been previously included in the price paid or the payable price.
   2- If it is provided free of charge by the importer (buyer) to the producer (manufacturer) directly or indirectly.
   3- If it is provided at a reduced cost, the addition is only made by the amount of the reduced amount.
   4- If it is used in the production of the goods yet to be valued.
   B- Determine the value of auxiliary items:
   To add the value of the auxiliary items to the transaction value of the goods yet to be valued, or to include them among the components of the calculated value, the value of the auxiliary items and the costs of shipping them to the location of production of the goods yet to be valued must be determined, including duties and taxes that are not refundable, and distributed proportionally to the value of the imported goods as follows:
   1-      If the auxiliary item consist of similar materials, components, pieces or parts included in the production of the imported goods, or consumed during the production of the imported goods, and the buyer obtained it from an unrelated seller, then the value of the auxiliary item is its own purchase cost. If the auxiliary item was produced by the buyer or a person associated with it, then its value is the cost of its own production.
    
   2-     If the auxiliary item consist of tools, foundries, molds or similar items used in the production process of the imported goods, and the importer has purchased them from an unrelated seller, their value is the cost of their production. And if the auxiliary item were previously used, the initial cost of purchasing or producing them should be adjusted to reflect the current value after use before determining it. But if the importer has rented the auxiliary item from an unrelated person, the value of the auxiliary item is its own rental cost. In both cases, the cost of any modifications or repairs made shall be added.
   Example (1): A Saudi importer provided a foreign producer with detailed designs necessary to manufacture the goods. The Saudi importer had purchased these designs from an engineering company in the GCC states in order to supply them to the foreign producer.
    
   Question: Is the customs value of the goods included for the value in that auxiliary item?
    
   Answer: No, because design work performed in the GCC states may not be added to the price paid or the payable price.
   Example (2): A Saudi importer provided molds to a foreign producer (exporter) for free. These molds are needed to manufacture goods for the Saudi importer. The Saudi importer had molds manufactured in one of the GCC states and other molds manufactured outside the GCC states.
   Question: Is the customs value of the goods included in the value of the molds?
   Answer: Yes, the value of the molds must be included in the value of the transaction, whether they were produced in the GCC states or not.
   C- The distribution of the value of auxiliary items: 
   The value of auxiliary items shall be distributed to the imported goods in a reasonable and an appropriate manner, in accordance with generally accepted accounting principles. According to the documents submitted by the importer.
   For example: If the total number of parts expected to be manufactured using the auxiliary item is to be exported to the country of importation, the total value of the auxiliary item may be distributed using one of the following approaches:
   1- On the first consignment if the importer wishes to pay the fees on the total value of the auxiliary item at once.
   2- On the number of units produced upon arrival of the first consignment.
   3- On the entire expected production of the auxiliary item, when contracts or firm commitments regarding this production are present.
   4 - Any approach required by the importer for the distribution is in accordance with generally accepted accounting principles.
   5 - if the imported goods were a part of the production, or if the auxiliary item is used in multiple countries, the approach of distribution is dependent on the provided documents from the importer.
   For example: The importer sent the producer molds used for the production of the imported goods, and the importer had agreed with the producer to purchase 10,000 pieces. When the first consignment containing 10,000 pieces of molds arrived, the producer had finished producing 4,000 pieces.
   In this case, the importer may request a distribution of value of the molds from the customs on either 1000, 4000 or 10,000 pieces or any other number in accordance with what is generally accepted accounting principles.
   • Fourth / B / 1 / 5:
   1.        The fees - the amounts - paid by the buyer in exchange for his exploitation of an intellectual property right or use licenses may include among other things the cost covering patent inventions, registered trademarks and copyrights where it is added to the customs value.
    
   2.      Fees for the right of reproduction shall not be added to the price paid or the payable price for the imported goods yet to be valued, which include goods such as: originals or copies of artistic or scientific works, originals or copies of industrial models or drawings, device models or samples and plant or animal species.
    
   3.       The amounts paid by the buyer in exchange for the right to distribute or resell the imported goods shall not be added to the price paid or the payable price, as long as those amounts were not paid as a condition for selling the goods for exportation to the GCC states.
    
   4.      If the intellectual property right is based partially on the imported goods and partially on other factors unrelated to the imported goods, the intellectual property right cannot be distinguished from private financial arrangements between the buyer and seller. It is not possible to determine the customs value according to the transaction value approach mentioned in Paragraph (Fourth) of this Article.
    
   5.       If the intellectual property right is based on the imported goods only and its amount can be determined easily. In this case, it shall be added to the price paid or the payable price.
    
   Fourth / C / 1 / C :
   The method of excluding customs fees and other taxes:
   Example: If the price paid or the payable price is worth (56,000) riyals that includes: the cost of incoming goods, insurance, freight (CIF), and customs fees with a percentage for example, in the GCC states is 20%, in addition to a tax due after importation of 500 riyals.
   Customs duties and taxes are deducted by this method:
   - 56,000 - 500 = 55,000
   - 55,500 ÷ 1.20 = 46,250 (result represents the CIF value)
   Four / C / 1 / D:
   Profits and other payments from the buyer to the seller that are not related to the imported goods such as stocks profits that pays shareholders, and that is not directly related to the imported goods, shall not be included in customs value. The difference between stocks profits and revenues shall be recognized. Revenues are a part of the seller’s worth whether it was directly or indirectly as a result of a resell, disposal or use of the imported goods and in this case, it shall be added to the value of the goods.
   Four / C / 1 / E:
   The funds financing interest for the purchase of imported goods either provided by the seller, the bank or any other individual, shall not be included in the customs value on the condition of:
   1- That said interests are separate from the price paid or the payable price for the imported goods.
   2- The financial agreement must be in writing.
   3- That the buyer can prove that the goods were actually sold at the declared price, which is the price paid or the payable price.
   3-    The financing interest rate shall not exceed the prevailing level in the country in which the financing was provided in regard of that transaction.
   Fourth / C / 1 / F:
   The customs value shall not be included in the costs of activities carried out by the buyer at his expense, except for the activities of which cost may be settled under the Paragraph (Fourth / B), even if they are benefiting to the seller. These activities include: marketing studies and research, publicity and advertising, preparation of exhibition rooms, and participation in commercial exhibitions.
   Fourth / C / 2:
   The financial balances held with the seller that are in favor for the importer, and that are included in the price paid or the payable price for the goods yet to be valued as compensation for a previous consignment or a commercial transaction, are settled away from the consignment yet to be valued as they are considered credits for previous shipments. Refer back to the example mentioned in Paragraph (First / 5) of this Annex.
   Fifth / A:
   1- The customs value means that the transaction value of identical goods previously accepted as customs value according to the provisions of Paragraph (Fourth) of this Article, also on the basis that those identical goods were sold for export to one of the GCC states on the same date or close to it which the goods yet to be valued were exported, or from the same manufacturing company with the same commercial level of the importer and the same quantities of the imported goods yet to be valued.
   2- If such values are not present, the transaction value of identical goods shall be used according to:
   A- From the same manufacturer, in different quantities and/or commercial level.
   b- From a different manufacturer, in the same quantities and/or at the same commercial level.
   c- From a different manufacturer, in different quantities and/or at a different commercial level.
   3 -The commercial level of the importer means that: it is the form of activities performed by the importer, such as: wholesale, retail, or personal consumption.
   4 - If there is a distinction between the goods yet to be valued and the identical goods in terms of quantities, commercial level and costs referred to in Paragraph (Fourth/ B / 1) of this Article, then the value of the identical transaction will be adjusted to take into consideration those distinction, whether it leads to an increase or decrease. Adjustments are made on the basis of conclusive evidence that demonstrates clearly the reasonableness and the accuracy of the adjustments, such as an approved price list that include values​​​​ indicating different levels or different quantities.
   Example: if the imported goods yet to be valued contains ten pieces, and the only identical goods that which a transaction value is available contains 500 pieces, and a price list from the seller abroad including different prices according to the quantities. In this case, adjustments can be made by resorting to that price list and applying the appropriate price accordingly with the quantities of imported goods yet to be valued. The transaction of identical goods may not necessarily be concluded with a quantity of ten pieces, as long as a valid price list from other sales in other quantities is present. If such objective procedure is not present, it is unsuitable to determine the customs value in accordance with the provisions of the transaction customs value of identical goods.
   5 -  When applying this paragraph, if there is more than one transaction value of identical goods sold at the same commercial level, with the same quantities and the same conditions of sale (in terms of payment method: cash or on credit), (and in terms of the condition of the goods upon sale: goods of the first production line, or “stock” goods such as leftovers from production lines, factory liquidation, end-of-season sales, etc.). Then the lowest of these values ​​will be considered.
   Fifth / B:
   1-      The customs value is the transaction value of similar goods previously accepted as customs value according the provisions of Paragraph (Fourth) of this Article, on the basis that those similar goods were sold for export to one of the GCC states, on the same date or close to it which the goods yet to be valued were exported, or from the same manufacturing company, with the same commercial level of the importer, and the same quantities of the imported goods being valued.
   2 - If such values are not present, the transaction value of similar goods shall be used according to:
   A- From the same manufacturer, in different quantities and/or commercial level.
   b- From a different manufacturer, in the same quantities and/or at the same commercial level.
   c- From a different manufacturer, in different quantities and/or at a different commercial level.
   3. The “importer’s commercial level” means that: the activities of the importer in the importation country: wholesale, retail, or consumption.
   4 - If there is a distinction between the goods yet to be valued and similar goods in terms of quantities, commercial level, and costs referred to in Paragraph (Fourth/ B / 1) of this Article, then the value of the similar transaction will be adjusted to take into consideration those distinctions, whether it leads to an increase or decrease. Adjustments are made on the basis of conclusive evidence that demonstrates clearly the reasonableness and accuracy of the adjustments, such as an approved price list that include values ​​indicating different levels or different quantities.
   For example: If the imported goods yet to be valued contains ten pieces, and the only similar goods which transaction value is available contains 500 pieces, and a price list from the seller abroad including different prices according to the quantities. In this case, adjustments can be made by resorting to that price list, and applying the appropriate price accordingly with the quantities of imported goods yet to be valued. The transaction of similar goods may not necessarily be concluded with a quantity of ten pieces, as long as a valid price list is present on sales in other quantities. If such objective procedure is not present, it is unsuitable to determine the customs value in accordance with the provisions of the transaction customs value of similar goods.
   5 -  When applying this paragraph, if there is more than one transaction value of similar goods sold at the same commercial level with the same quantities, and in the same conditions of sale (in terms of payment method: cash or credit. In terms of the condition of the goods upon sale: goods of the first production line, or “stock” goods such as leftovers from production lines, factory liquidation, end-of-season sales, etc.). Then the lowest of these values ​​will be considered.
   Sixth / 1:
   If a number of units of the same imported goods or identical or similar goods are sold in different quantities, the price of unit shall be the price at which the largest number of units were sold.
    Example (1): Goods are sold based on a price list that includes discounted unit prices when purchasing large quantities. The following resulted as:

Quantity of units sold	Unit price (SAR)	Number of sales	Total quantity sold at one price
1 – 10 units	100	10 sales of 5 units 5 sales of 3 units	65
11 -25 units	95	5 sales of 11 units	55
More than 25 units	90	One sale of 30 units One sale of 50 units	80

In this case, the quantity of 80 pieces is the largest total quantity sold at one price, which is (90) Saudi riyals. Therefore, the “unit price of the largest total quantity" is (90) Saudi riyals.

Example (2): Two sales were made to two unrelated individuals, the first was 500 units sold at a price of (95) Saudi riyals per unit, while the second sale was 400 units sold at a price of (90) Saudi riyals per unit.

In this case, the largest number of units sold at a certain price in this example is 500, so the unit price of the largest total quantity sold is (95) Saudi riyals.

 

Example (3): The following quantities are sold to unrelated individuals at different prices, as shown below: 

-Sales:

Quantity sold by units	Unit price (SAR)
40 30 15 50 25 35 5	100 90 100 95 90 90 100

-Total

Total quantity sold at one price	Unit price (SAR)
65 50 60 25	80 95 100 105

In this case, the largest total quantity sold at a given price in this example is 65 units, so the unit price of the largest total quantity is (90) Saudi riyals.
• Sixth / 1 / A:
1- In the event that the ownership of the goods yet to be valued belongs to the seller or the exporter outside of the GCC states, and are sold on the basis of a delegation or agency commission, that commission is deducted: it is the commission due or is usually due from the seller to the importer in exchange for the costs he had borne for selling the goods locally.
2 - But if the goods yet to be valued are sold to the importer, who works at his own expense, then the “profits and general expenses” are deducted: these are the profits and general expenses that the importer adds to the selling price in local market, unless they are not close and consistent with the amount of profits and general expenses that is normally added during sales transactions in the GCC states for goods of the same class or type as goods yet to be valued, imported from the same country or from other countries. This usual amount is deducted on the basis of appropriate information from a source other than the importer.
3 - The amount of profits and general expenses shall be taken as a one total amount. One of the both amounts may be inconsistent with the equivalent of it in a specific industry, but as long as their total is consistent with the usual "profits and general expenses" then it shall be used. The amount to be deducted must be determined on the basis of the information provided by the importer or from someone on his behalf. General expenses include direct and indirect costs of marketing said goods.
4 - Goods of the same class or type means: goods that fall within a group or circle of goods produced by a specific industry or an industrial sector, including identical and similar imported goods without it being limited to them, whether they were from the same country of production or the exportation of goods yet to be valued or from another country. Determining whether certain goods are of the same class or type depends on a case-by-case basis by referring to the circumstances surrounding the goods.
• Sixth / 3:
1 - Despite the loss of the identity of the imported goods, there may be cases where the value added as a result of processing or manufacturing can be accurately determined without unreasonable difficulties. This process should be done on the basis of qualitative and quantitative information related to the cost of said work. It is based on accepted manufacturing formulas, approaches, construction methods, and other industry practices.
2. On the other hand, there may be cases in which the imported goods retain their identity, but are considered secondary component of the goods sold in the importing country, and that this method of evaluation is not suitable. In a result, each case should be considered individually.
Seventh / 1:
As a general rule, the customs value is determined according to this Article on the basis of information easily available in the GCC states. It may be necessary when applying the calculated value as the basis in (Seventh), to examine the production costs of the goods yet to be valued and other information that must be obtained from outside the GCC states. The use of the calculated value approach is generally restricted in cases where the buyer and seller are related, while the producer is prepared to give customs the necessary cost information, and provide verification that may be required later.
• Seventh / 1 / A:
1. The “cost or value” referred to in this paragraph is determined on the basis of information relating to the production of the goods yet to be valued, provided by or on behalf of the producer himself, and consistent with accounting principles generally accepted in the exporting country. If this information is available from another exporter, customs must notify the importer -upon his request- of the information that will be used and its source, while preserving confidentiality in accordance with Paragraph (First/3) of this Article.
2- The cost or value referred to in this paragraph includes:
A-    The costs of the items mentioned in paragraphs (Fourth/ B / 1 / (2) and (3)) of this Article.
B - The costs of the elements specified in (Fourth / B / 1 / 4) of this Article. Proportionately distributed according to the provisions of Paragraph (Fourth / B / 1 / 4) of this formation annex. Keeping in mind that the costs of the elements mentioned in Paragraph (Fourth / B / 1 / 4 / D), which are implemented in GCC states, shall not be included in the customs value within the cost of materials, except to the extent borne by the producer for obtaining these elements. The calculation of the value of elements referred to in this paragraph shall not be repeated in any case.
Seventh / 1 / B:
1 - The amount of profit and general expenses should be taken as one total. If profits of a product are low, and its general expenses are higher. Taking them together as a whole can be consistent with the profit and general expenses that are usually reflected in sales of goods of the same class or type.
1-      When the numbers provided by the producer for profit and general expenses do not correspond to the numbers that are usually reflected in sales of goods of the same class or type of goods yet to be valued, produced by producers in the exporting country for export to the GCC states. In this case, the determination shall be based in the amount of profit and general expenses to objective data, accordingly with Paragraph (Second / 1/ A) of this Article, other than those provided by the producer of the goods or provided with his name.
3 - The general expenses mentioned in Paragraph (Seventh/1/B) of this Article, cover all direct and indirect costs of producing and selling goods for export that are not included within Paragraph (Seventh/1/A) of this Article.
4 - When determining the usual general profits and expenses in accordance with the provisions of Paragraph (Seven / 1 / B) of this Article, a search is conducted in the narrowest group or circle of goods with the same class or type. It includes sales of identical or similar goods produced in the same country of production for the goods in yet to be valued is determined, and the goods sold for export to the GCC states including goods yet to be valued is determined. Whether certain goods are of the same class or type as other goods is determined in each case individually with reference to the surrounding circumstances.
• Eighth / A:
  This paragraph does not give specific methods for evaluation, but requires that the customs value be determined according to:
1 - Using reasonable approaches or methods.
2- Consistent or compatible with general principles and provisions of the Customs Value Agreement, and with Article Seven of GATT 1994.
3- Based on the data available in the importation country.
1- Determining the value using reasonable methods. The customs value must be based in accordance with the provisions of this paragraph, to the extreme extent possible according to the principles of determining the customs value previously mentioned in paragraphs (Fourth) to (Seventh), with a reasonable degree of flexibility in the application process, and in line with the objectives of and the provisions of the value agreement. If it is not possible to determine the customs value using these approaches, the customs value may be determined using other logical methods, providing that:
1- That these methods are not prohibited in accordance with Paragraph (Eighth / B).
2- That these methods must be consistent and compatible with general principles and provisions of the value agreement.
Example: A shipment was received containing a rented device for a specific period, such as a period of three years (representing the expected lifespan of the device) with a monthly rent of (2000) Saudi riyals. An identical or similar device has not been imported previously. It was not possible to determine the customs value of that device according to the principles stated in paragraphs (Fourth to Seventh).
To determine the customs value of the device, the absence of a sale is taken into consideration to apply the transaction value, An identical or similar device has not been imported previously. This device has not been resold in the GCC states, and no information is available about the cost of producing such device. Therefore, the customs value cannot be determined in accordance with paragraphs (Fourth to Seventh) even in its flexible form. However, there is a reasonable approach that can be applied under Paragraph (Eighth), which is to use the full rental fee, which may represent the expected lifespan of the device (36 months x 2,000 = 72,000 riyals) as the customs value.
2- General principles of the Customs Value Agreement:
A- Relying on the maximum extent possible on the transaction value of imported goods.
B- A unified value system.
C- Fair and simple standards.
D- Clear and neutral.
E- Consistent and compatible with commercial practices.
 
3- Information available in the importation country:
If information is provided from a foreign source, it will not prevent the use of such information for the purposes of determining value under Paragraph (Eighth) of this Article. As long as correct and accurate information is provided for the GCC states, such information shall be used.​

​

​