Transaction Value Method of Valuation
Memorandum D13-4-1

Ottawa, August 22, 2013

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In Brief

  • The editing revisions made in this memorandum do not affect or change any of the existing policies or procedures.

This memorandum outlines the method of valuation contained in section 48 of the Customs Act.


Sections 45 and 48 of the Customs Act

Guidelines and General Information

Transaction Value Defined

1. The transaction value is determined by ascertaining the price paid or payable for the goods when the goods are sold for export to Canada to a purchaser in Canada, and adjusting the price paid or payable in accordance with subsection 48(5) of the Customs Act. Subsection 48(1) identifies three requirements that must be met to apply the transaction value (assuming that the importer has complied with the remaining provisions of section 48). These requirements are:

Sold for Export to Canada

2. In order to apply section 48, the goods being appraised must be the subject of a sale for export to Canada. The term "sale" will be taken to mean the transfer of ownership of the goods for a monetary consideration. Goods which are not the subject of a sale cannot be valued under section 48.

3. Importers may be required to provide documentation such as invoices and bills of lading, which substantiate that the sale of the goods was a sale for export to Canada.

4. Refer to Memorandum D13-4-2, Customs Valuation: Sold for Export to Canada, to determine if a qualified sale has occurred.

Purchaser in Canada

5. In order to apply section 48, the goods being appraised must also be sold to a "purchaser in Canada." For the purposes of subsection 45(1) of the Act, "purchaser in Canada" means:

6. It may be necessary to use Memorandum D13-1-3, Customs Valuation – Purchaser in Canada Regulations, guidelines and test criteria to determine if the purchaser meets the requirements of the Customs Act.

Price Paid or Payable

7. Subsection 45(1) defines "price paid or payable" as the aggregate of all payments made or to be made, directly or indirectly, in respect of the goods by the purchaser to or for the benefit of the vendor.

8. Payment may be made by way of letters of credit or negotiable instruments, and may be made directly or indirectly. The term "price paid or payable" refers to the price for the imported goods. Thus the flow of other payments from the purchaser to the vendor may not relate to the imported goods and may not form part of the value for duty. Refer to Memorandum D13-4-3, Customs Valuation: Price Paid or Payable for a consideration of other payments, which form a part of the price paid or payable.

9. Activities undertaken by the purchaser on his own account, other than those for which an adjustment is provided for in paragraph 48(5)(a), are not considered to be an indirect payment to the vendor, even though they might be regarded as a benefit to the vendor. The cost of such activities shall not, therefore, be added to the price paid or payable for the imported goods.

Adjustments: Additions and Deductions

10. Having ascertained the price paid or payable, the next step in determining the transaction value involves making any of the adjustments, described in subsection 48(5), which may be appropriate.

11. To the extent that they are not already included in the price paid or payable, amounts equal to the following are to be added:

12. To the extent that they are already included in the price paid or payable, amounts equal to the following are to be deducted:

13. See Memorandum D13-4-7, Adjustments to the Price Paid or Payable for detailed addition and deduction allowances.

Limitations on the Use of Transaction Value

14. In order for a transaction value to be accepted as a value for duty, certain requirements must be met. The requirements are set out in subsection 48(1) and pertain to:

15. For more details, see Memorandum D13-4-4, Limitations on the Use of Transaction Value Method.

Additional Information

16. For more information, within Canada call the Border Information Service at 1-800-461-9999. From outside Canada call 204-983-3500 or 506-636-5064. Long distance charges will apply. Agents are available Monday to Friday (08:00 – 16:00 local time/except holidays). TTY is also available within Canada: 1-866-335-3237.


Issuing office:
Trade Programs Directorate
Headquarters file:
Legislative references:
Customs Act
Other references:
D13-1-3, D13-4-2, D13-4-3, D13-4-4, D13-4-7
Superseded memorandum D:
D13-4-1, April 17, 2001
Date modified: