The golden rule when third party invoicing is involved in international trade consignments is to “use the last invoice”. Third party invoicing refers to invoices issued by a third party, i.e. a buying or selling agent.
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But why is it important and what are the implications of not taking the most recent invoice into account?
It has to do with commissions. Commissions according to the SARS policy on Valuations (SC-CR-A-03 dated 24 January 2014) is when an intermediary acts on behalf of either the supplier of the goods (selling commission) or the importer of the goods (buying commission). Third party invoicing may also include other costs, charges and expenses as a condition of the sale.
Commissions and other expenses influence the Customs value of goods imported and hence, the amount of duty and Vat payable to SARS.
The last invoice issued in the trade transaction would (or should), in addition to the original price paid or payable, include all commissions, costs, charges and expenses on the invoice. This does not mean that such commissions must always be included when calculating the Customs value for duty purposes. Buying Commissions are often accepted by Customs (and hence deductible) provided these are “bona fide” buying commissions.
Occasionally when multiple invoices are involved, confusion may exist over which invoice should be used for Customs clearance purposes.
A personal piece of advice is to obtain copies of all invoices involved in the transaction. Analyse the value of each and explore the invoice with the highest value. If Commissions or other expenses are reflected on a separate invoice altogether, then these too must be considered for inclusion.