Argentine Supreme Court rules on customs royalties and valuation

The Supreme Court of Justice of the Nation has upheld a ruling regarding the customs valuation of imports for Wabro S.A. The decision confirms a previous sentence from the National Chamber of Appeals in Federal Administrative Litigation, which had revoked a tax charge imposed by the General Directorate of Customs (DGA).

The dispute centered on whether royalties paid by the importer to brand owners should be added to the customs value of imported goods. The DGA argued these payments acted as a condition of sale. However, the Court noted that under the GATT 1994 agreement, three simultaneous requirements must be met for such an adjustment: royalties must relate to the goods, not be included in the price paid, and be a condition of sale.

The Chamber determined that the license agreements contained standard quality control, inspection, and audit clauses, which did not prove that royalty payments conditioned the sale of the goods. Furthermore, the manufacturers involved were third parties unrelated to the importer or the licensors.