This is similar to (but not the same as) samples supplied free of charge discussed in a previous blog. The issues around commercial invoices versus pro-forma invoices also discussed in a previous blog apply here.
The aspect of samples has to do with valuation, i.e. the value of the goods for Customs purposes. Again, this affects the rate of duty and Vat. Should one rate samples as “free” or “zero” on the commercial invoice, or should there be a value even though they are being supplied “free of charge”?
Terms of Sale, or Terms of Delivery are most commonly referred to as Incoterms (International Commercial Terms) these days. Terms of Sale simply must be reflected on the commercial invoice for Customs purposes.
Customs treat Delivery Terms somewhat differently from the conventional intention.
This seemingly complex subject is rarely understood. Getting it wrong can lead to un-necessary risk which is easy to avoid.
While risk is normally of a financial nature, the administrative burdens of getting it wrong can also be overwhelming to importers.
Trade Agreements (to which Invoice Declarations relate) are a topic on their own. One agreement which may be specified on the commercial invoice (in lieu of using a Certificate as proof) for preferential duty purposes is the EU (European Union) Trade Agreement. This agreement was established between the EU and certain countries in the SADC (Southern African Development Community).