CAR SHIPPING TO AUSTRALIA – CUSTOMS VALUATION
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Special consideration should be given as to the method of valuation that will be used by the Australian Customs Service for any particular vehicle. A definitive ruling as to which method of valuation is used is determined by the customs officer at the Australian port, however an indication and further information can be advised by contacting a destination CUSTOMS CLEARANCE AGENT. The Australia-wide Customs Information Centre can be contacted on 00612 6275 6666. The customs value of an imported private motor vehicle (whether new or used) is assessed by one of the following methods:
(NORMAL) METHOD OF VALUATION (called ‘normal’ but not normally used by customs): The customs value for vehicles if when purchased the sale under consideration took place with the purpose of shipping it to Australia is normally assessed as the purchase price actually paid in the UK for the vehicle. This method of valuation is usually only used if the vehicle was purchased in the UK within 12 months of shipment (mainly cars older than 1989).
This method of valuation is not ordinarily used in cases where:
- the vehicle has altered during ownership
- it has been owned for more than a year
- 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 UK at only a token or nominal price
- the vehicle value alters considerably between the dates of its purchase in the UK and its importation into Australia, due to the addition of significant accessories, fittings or options, major restoration, modifications or any improvements
- significant damage has been incurred
- the vehicle was not purchased in an actual sale but was otherwise acquired, such as by donation, gift, prize of bequest
- the vehicle was personally built wholly or in part.
(ALTERNATIVE) METHOD OF VALUATION (called ‘alternative’ but is the method more normally used): 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 GSTis levied. The importer is responsible for obtaining, as well as the cost of, the ‘landed’ valuation.
In the majority of circumstances where the ‘landed cost’ valuation method is applied 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 has not yet been imported and registered. From this figure can be deducted all the subsequent costs of getting a vehicle ‘on the road’ and then deducting the 10% GST and then the 5% duty. From the remaining figure customs would then deduct 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 full 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 UK value at the time of shipment rather than the probable higher UK price paid when the vehicle was originally purchased.
The clearance agent or Australian customs may be able to advise the details of a local valuer at destination that may be able to give an indication of an ‘as landed’ value to enable an estimate of taxes to be ascertained. It is well worthwhile contacting a clearance agent to discuss the best valuation procedure. Some states have lower valuations than others and an initial guide can be assessed from the Australian market values on the internet at:
Further information about customs valuations, plus a guide to prices and useful website and contact addresses, can be found in the Australia Info Pack (PDF).